Credit Card Interest Calculation

A

ali

Registered User
Messages
231
Hi all,

Got my halifax bill. Balance was €2425.00 Min payment requested was €72.75. Paid minimum and was waiting on a refund from revenue to pay balance which did not come before due date. New bill came showing interest of €38.99. (1.0534% per month - 13.4% apr) .

Can someone explain how this figure is calculated.

Thanks,

A.
 
Credit Card Interest is a long winded and complex equation you'll need to ring Halifax and they should be able to send you out some literature on how it is calculated.
 
Danniboo7 said:
Credit Card Interest is a long winded and complex equation you'll need to ring Halifax and they should be able to send you out some literature on how it is calculated.
Click to expand...

Thanks for the reply Danniboo. I thought one of the many financially astute on this site would have been able to work it out in their heads and post the answer!
 
Well i'm no Eddie Hobbs but I did work for a certain Credit Card company and this is what we told our customers : ) I could be wrong maybe someone else could shed some light.
 
You would need to post details of balance, cash withdrawals, purchases and of Halifax interest rate before anyone could do a calculation.

An apr of 13.4% wouldn't be exceptional for a credit card
 
Hi Ali

I thought one of the many financially astute on this site would have been able to work it out in their heads and post the answer!
Click to expand...

How could I resist a challenge like that?

Forget, for the moment, everything you know about credit cards and interest free periods and minimum payments. They are irrlevant.

The interest is calculated from the day of purchase to the day you paid off the purchase.

So you "borrowed" 2425 and paid off €75.

You will be charged interest on the €2425.

You borrowed €100 on 1 September
You received a statement on 25 sept with this item on it
You did not pay this off, so you were charged interest on it on the next statement on 25 October.

So that would be nearly two months interest.

So you averaged 1.5 months' interest on 2425 @ 1% = around €36.

So it looks about right.

If you pay the full amount by the payment date, they waive this interest. if you don't pay the full amount or if you mist the payment date, then they charge the interest as set out above.

Brendan
 
Brendan said:
Hi Ali



How could I resist a challenge like that?

Forget, for the moment, everything you know about credit cards and interest free periods and minimum payments. They are irrlevant.

The interest is calculated from the day of purchase to the day you paid off the purchase.

So you "borrowed" 2425 and paid off €75.

You will be charged interest on the €2425.




























You borrowed €100 on 1 September
You received a statement on 25 sept with this item on it
You did not pay this off, so you were charged interest on it on the next statement on 25 October.

So that would be nearly two months interest.

So you averaged 1.5 months' interest on 2425 @ 1% = around €36.

So it looks about right.

If you pay the full amount by the payment date, they waive this interest. if you don't pay the full amount or if you mist the payment date, then they charge the interest as set out above.

Brendan
Click to expand...

Ta muchly Brendan. It's the date they charge from then, that is key and what I missed. Paid off now with the revenue refund.

A
 
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