heresmo

It must be Monday morning Just received statement - the interest system is changing, in their favour, thus:

E.g. Start with a zero balance, make purchases, then pay the full amount after statement date, there's no difference.

Howver, if you start with zero, make say £200 purch then pay off £50 by the due date, leaving £150 for next month, which you intend to pay off by the due date, you'll now be charged interest on the £150 from the last statement date to the payment date, such charge being shown on the following statement. (My paraphrasing - please read the actual leaflet.)

In truth, it's not unreasonable as you'll have benefit of the money for the period from statement to payment date, though presumably it's previously been accounted for in the interest rate to compensate them.

This to me says:

1) Even if you pay off the balance as soon as statement is received, it'll still be several days later than the issue date, so you'll already have incurred an interest charge.

2) When you think you've paid off your bill and might therefore possibly ignore the next one (thinking it will be zero), it won't be and if you don't pay it, you'll be whacked with a significant missed payment fee.

The only way to avoid such interest IMO would be to make payment of the £150 in time to reach them by the statement date. That is contrary to normal thinking, so I suspect a few peeps will be caught out.

Oh well, roll on Tuesday

Mo

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swedishskoda

(my italics)

Dear Mo, I'm flabbergasted - how come that you who always seems to hit the nail on the head when posting should be the one who gives redundancy a face? Must've been an early Monday morning or a late Sunday night...

KenONeill

Not sure I understand what's changing there. You borrow money from Statement1 to Statement2, and pay interest on it. You then pay further interest from Statemnt2 until repayment.
Actually, with the amout likely to be involved, I think you'll find statement 3 is likey (ignoring further transactions) to say something like:-

Balance Fwd £150
Payment recd -£150
Interest due £0.56
Small balance written off -£0.56

Been there, done that, didn't buy the t-shirt cos I didn't see why I should spend £10 on saying that the bank didn't charge me 67p!

heresmo

Well, perhaps someone could kindly explain it to me? My balance is approx £500, due c.20 October - statement received today. Estimated interest is c.£14. I'd expect to pay that in time for c.20 October. How much interest will I pay for this "meanwhile" period - i.e. the diff between paying today or for c.20th?

I know what I reckon, so I'd be delighted for someone to correct me if I'm perceiving this new change wrongly.

Regards
Mo

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robmawer

So...are you saying:
-£200 purchase
+£50 payment before due date but before statement date, followed by
+£150 payment before due date but after statement date

...then they'll charge you interest on the outstanding amount (£150) between statement date and due date?

Whereas if you did:
-£200 purchase
£200 payment between statement date and due date

...then you won't get charged any interest?




Rob.

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swedishskoda

I know it's not a very helpful suggestion but have you tried calling customer "service" (that is: can you find the time for such a call...)

I'm prepared for anything when it comes to banks and insurance companies but the idea of not being informed about your correct balance until after payment is absurd, maybe too absurd. Could be that they've just failed trying to write intelligible leaflets.

Good luck in the struggle.

heresmo

This is what the leaflet says:

Quote:

If you pay in full each month this change does not affect you

The interest free period on new purchases will not be affected if you pay your account in full and on time each month.

If you don't pay in full each month the change will affect you when you do pay in full

If you currently make a partial or minimum payment, the change will affect you but only when you choose to pay your statement balance in full.

When you do pay in full, further interest will be charged for the period between your statement being produced and your payment being received by us. This interest will appear on your next statement which you will also need to pay in full to prevent additional purchase interest charges.

This change will not affect the interest free period on new purchases.

Helpful advice

Please remember, the earlier you make your payment the less interest you'll be charged. Only making minimum payments will cost you more and take you longer to clear your balance.

Unquote.

Telephone numbers and charging rates for those are then give and their web address Credit Cards, Personal Loans and Insurance - Barclaycard

Edit: The leaflet says with effect from November 2007

Regards
Mo

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robmawer

Ah...no, I don't think it works as you illustrated...what I believe it means is:

-£200 purchase
+£50 payement between statement date and due date for "£200" (thus covering minimum payment and a bit).
+£150 payment after the due date for the original "£200", plus interest for elapsed time until payment full amount is paid.

If that makes sense...


Rob.

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KenONeill

I think it may just be intended as a clarification. What they are saying is that, if you don't always pay your account off in full, you will be charged interest on the balance from you make the transaction until you clear the balance, and hence may incur interest. See my example above, which is how Mastercard has worked for at least 20 years.

heresmo

Sorry, but that's the change they are pointing out to us. OK. Answer question please: I pay today, or three weeks from now.

Yes I know I can ring them, but "demand for this service is extremely high at the moment."

Will report back.

As said originally - just an alert that something's going on. If nothing is, then why would they send us a leaflet? I've already given an alert, so my work here is done. I willl post more depending on how much it costs me to ring them

Mo

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robmawer

In terms of incurring interest, it doesn't matter so long as you pay in full by the due date - you could pay a tenner every day from the day you made the purchase until the due to date, and you wouldn't incur any interest provided it was all paid off by the due date.

If you made the minimum payment in the first month, and so were at a stage where there was an amount gaining interest, the interest would be charged up until payment was received in full, NOT up until the statement date.

So, for example:
1. £100 purchase
2. Statement arrives you pay £10 (min. payment) of the £100 owing, tells you interest in a months time will be £4 if you make min payment.
3. Next months statement arrives for £94. You then pay this in full a week after the statement date.
4. The month after this you will have an interest charge of 1 week's interest on £94.

So I suspect the change is just that interest occurring will keep occurring until it's paid for, rather than for paying off a statement in full.
Though this doesn't affect paying off in full every month, as none of that will incur interest.


Rob.

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heresmo

[my bold]

Exactly! That's what they're are telling us. It's not the way it was before.

That is why heads-up re how best to pay off Barclaycard credit card debts.

If I'm right, I'm sane. If not, someone else will no doubt be appointed to look after my finances

Mo

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robmawer

Indeed - given that typically statement and due date can be a couple of weeks apart, could easily end up adding an extra half-months interest even paying "on time"!


Rob.

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heresmo

Actually, I can't believe it's only me who sees that this is theoretically unworkable but will no doubt finish up in their favour, or agrees that they should explain their philosophy more clearly.

These are my thoughts only:

One cannot reach a zero balance unless an amount is paid off before (in time for) due date. Ever decreasing circles apply if paid later. Meaning that if there is an opening balance on the account of even a penny, then it seems that the new interest system charge could be applied.

Mo

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gadgetman

Barclaycard are thieving sods anyways.

Seriously, why would you want to pay such high rates?????

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Lick the window of life

Why not join the Briskoda Last.fm group?

heresmo

I honestly seriously suggest that peeps consider how charges are applied for credit cards they hold. If paid off each month, then it's perhaps less important than those who have outstanding balances. All that glitters is not gold. One should understand what charges are being levied in total with whichever card.

Regards
Mo

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robmawer

Possibly...it depends on whether they charge interest on interest, and after what point (ie. you get upto 56 days interest free credit on purchases, same thing may apply on interest charges?).

Suspect this is part of Barclaycard's initiative to encourage people not to have credit card debt (or at least, make some extra £££ off the back of those that do ). Bit like the Flexi-Rate thing to give lower rates to people who paid off more than the minimum amount.


Rob.

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