Credit Cards

[rixalex]

I always thought that when using a credit card which you have elected to pay off the balance in full, month by month, that there were no interest charges.

Over the last couple of months i've just started using some of my Natwest Credit Cards, which i haven't used for some time. Looking at my bank statements i see that although indeed the balance is settled in full by direct debit every month, as per my instructions, i am also getting charged with interest payments. Haven't worked out the percentage - it's not a massive amount of money - but the point is i thought that using credit cards in this way afforded one free interest for the period from purchase to the time when the bill is due. Pay after this due date and then obviously you do pay interest, but pay before i thought not.

Have things changed?

[dave2]

Just a thought ....by using ... do you mean getting cash from an ATM in Thailand ?

if Yes its a cash advance charge of probably about 3 quid every time you get cash out

dave2

[phaethon]

These are UK CCs?

I have CCs with Halifax, Capital One and MBNA and don't get charged for the first month. Check your terms and conditions and then ask them to explain themselves.

(BTW: I dumped NatWest years ago.)

[Tim207]

I always thought that when using a credit card which you have elected to pay off the balance in full, month by month, that there were no interest charges.

Over the last couple of months i've just started using some of my Natwest Credit Cards, which i haven't used for some time. Looking at my bank statements i see that although indeed the balance is settled in full by direct debit every month, as per my instructions, i am also getting charged with interest payments. Haven't worked out the percentage - it's not a massive amount of money - but the point is i thought that using credit cards in this way afforded one free interest for the period from purchase to the time when the bill is due. Pay after this due date and then obviously you do pay interest, but pay before i thought not.

Have things changed?

While it is entirely up to your agreement with the credit card company it is general practice to give a grace period. I have seen grace periods of only 21 days which means a purchase early in the cycle and a payment late in the cycle will cause a few days interest to acrue. Also, there is usually no grace period on a cash advance so interest will start to acrue imediately.

[rixalex]

Just a thought ....by using ... do you mean getting cash from an ATM in Thailand ?

if Yes its a cash advance charge of probably about 3 quid every time you get cash out

dave2

No, these weren't cash withdrawals from ATMs, but purchases made at places like HomePro.

[rixalex]

These are UK CCs?

I have CCs with Halifax, Capital One and MBNA and don't get charged for the first month. Check your terms and conditions and then ask them to explain themselves.

(BTW: I dumped NatWest years ago.)

Yes, UK cards. Natwest Visa and Mastercard.

I did check their conditions but found it a little hard to understand. I would contact them but being out of the UK and the amounts being quite small, haven't bothered to so far. Just thought i might get the answer here quicker.

Have considered dumping them but there comes a point when you've been banking with one place for so long that you feel you must have accrued some sort of trust with them that one day you might need to call in. But perhaps i'm kidding myself that my loyalty and impecable record would count for much. Who knows.

[rixalex]

I always thought that when using a credit card which you have elected to pay off the balance in full, month by month, that there were no interest charges.

Over the last couple of months i've just started using some of my Natwest Credit Cards, which i haven't used for some time. Looking at my bank statements i see that although indeed the balance is settled in full by direct debit every month, as per my instructions, i am also getting charged with interest payments. Haven't worked out the percentage - it's not a massive amount of money - but the point is i thought that using credit cards in this way afforded one free interest for the period from purchase to the time when the bill is due. Pay after this due date and then obviously you do pay interest, but pay before i thought not.

Have things changed?

While it is entirely up to your agreement with the credit card company it is general practice to give a grace period. I have seen grace periods of only 21 days which means a purchase early in the cycle and a payment late in the cycle will cause a few days interest to acrue. Also, there is usually no grace period on a cash advance so interest will start to acrue imediately.

Thanks for that answer. That could very well explain it. The only area of confusion for me if that is the case, is why when a number of years ago i was using my cards regularly i never seemed to incur these interest charges. Can't surely have been lucky in the timing of every one of my purchases!

Anyway, will be back in the UK shortly so will look into it then.

[Pib]

Just a thought ....by using ... do you mean getting cash from an ATM in Thailand ?

if Yes its a cash advance charge of probably about 3 quid every time you get cash out

dave2

No, these weren't cash withdrawals from ATMs, but purchases made at places like HomePro.

Maybe it's a currency conversion fee of around 1% like most U.S. credit cards charge, whether it's a debit or credit card.

[phaethon]

FRom: http://www.natwest.com/personal/credit-car...es-charges.ashx

Classic, Gold and Platinum credit cards

...

Interest Free Period

Maximum 56 days for purchases if you pay your balance in full and on time, and have paid the previous month's balance in full and on time

No interest-free period on cash advances or money transfers

That looks pretty standard. If you buy something the day after your statement date you have until the following statement's payment due date interest free. So something else is being charged, as said above maybe conversion charge. Does it actually say interest?

[rixalex]

FRom: http://www.natwest.com/personal/credit-car...es-charges.ashx

Classic, Gold and Platinum credit cards

...

Interest Free Period

Maximum 56 days for purchases if you pay your balance in full and on time, and have paid the previous month's balance in full and on time

No interest-free period on cash advances or money transfers

That looks pretty standard. If you buy something the day after your statement date you have until the following statement's payment due date interest free. So something else is being charged, as said above maybe conversion charge. Does it actually say interest?

Many thanks for all the replies.

Yes, "Interest" is exactly what it says on my on-line bank statement. Seems like i should chase it up then.

Thanks again.

[kiakaha]

I always thought that when using a credit card which you have elected to pay off the balance in full, month by month, that there were no interest charges.

Over the last couple of months i've just started using some of my Natwest Credit Cards, which i haven't used for some time. Looking at my bank statements i see that although indeed the balance is settled in full by direct debit every month, as per my instructions, i am also getting charged with interest payments. Haven't worked out the percentage - it's not a massive amount of money - but the point is i thought that using credit cards in this way afforded one free interest for the period from purchase to the time when the bill is due. Pay after this due date and then obviously you do pay interest, but pay before i thought not.

Have things changed?

While it is entirely up to your agreement with the credit card company it is general practice to give a grace period. I have seen grace periods of only 21 days which means a purchase early in the cycle and a payment late in the cycle will cause a few days interest to acrue. Also, there is usually no grace period on a cash advance so interest will start to acrue imediately.

my particular credit card is as follows :

55 days interest free on worldwide purchases

no fees for cash advances from ATM's worldwide, no foreign currency conversion fees either

ok interest rate on credit balances, 4.5% (New Zealand dolllars)

debit interest rate is negligible in my case because I always keep card in credit

low yearly fee (i negotiated a lower fee due to having other business with the bank)

a bunch of other perks, clubs and loyalty schemes (which i dont really use)

credit cards can be incredibly handy if you get/negotiate a good plan and use your card financially responsibly.