# AIB Credit card interest calculation?



## MelF (6 May 2009)

I usually pay off my AIB credit card every month but this month I paid off less than I thought and left it short by €500. Just got my statement and I've been charged over €50 in interest! Can anyone work out the interest rate they are using to come up with that figure as I can't get my head around it but it seems like an awful lot to charge on a relatively small amount.


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## TarfHead (6 May 2009)

AFAIK .. if you underpay your CC bill, they charge you interest on the gross amount of the bill, not the net. The interest rate should be less than 2% for the month.


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## MelF (12 May 2009)

I had no idea they would charge on the full amount! But how can they charge interest on money that's already been paid?


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## randombloke (12 May 2009)

MelF

I had this issue a few years ago. 
I also usually pay in full every month but a few years ago had a particularly large bill, about 4000, so I paid about 3500 as I would be getting a refund from elsewhere for some of the bill so would pay it next month. 
I was disgusted when I got next statement, they charged me interest on the entire 4000 and not the 500 balance.
I phoned to query this and they helpfully just posted me a copy of their terms and conditions. I asked if I paid 3999.99 what would the story be and they replied that I would be charged interest on 4000 and not €0.01!!
I am glad to report that I wait till the very last moment every month to pay my bill to take advantage of interest free periods and they have never earned another cent of interest from me since than and nor wull they into the future.
They are basically one step above moneylenders with policies like that.


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## Mayo1969 (12 May 2009)

Here's one for you.... I actually have been penalised by AIB for paying my Credit Card Bill before it became due. I had run up a bit more than usual on the card 2 month ago so I decided to offset it by paying a chunk each week at payday. It now transpires that even though I paid off more than the full amount due over the course of 4 weeks, because one of the payments was made 2 days before the bill became due this wasn't included in the payment and so they levied interest on me.


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## JoeB (12 May 2009)

yeah.. i think that's a underhand practice.. even if it is in the terms and conditions.. the terms and conditions can be a little obscure at times.

Another thing to remember is that for cash advances there is often no period of credit..

Another thing to keep in mind is the order in which yor payments are allocated.. i.e sometimes cash advances will be paid last, depsite the fact that interest is being charged on them from day 1.

Despite having got an A1 in honours Maths at the Leaving  I don't think I would be able to calculate the interest due correctly.. it is very complex.

The point is to not bother trying and just pay in full, or else the interest is often high and unexplainable.

Cheers


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## Hybrid Boss (26 May 2009)

Its worked out by using *Compound interest*


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## JoeB (26 May 2009)

yes, but the compound interest must be calculated seperately on several different balances, which also run for different amounts of time... so not too easy.

There does seem to be a simplification and that is that you're charged interest on your average balance.. however even working out the average balance isn't straightforward.. as some items like cash advances, government fees or credit card fees may not be included and may be treated seperately.

To be honest I'm not sure.


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