AIB VISA Interest Charge

L

Little Sis

Registered User
Messages
51
I am diligent, nay maniacal about clearing my credit card balance every month - it's a useful tool if used correctly, that's how I feel.

Anyway, last month had a balance of €19.58, I was a day late with my payment and they charged me €1.07 in interest - FOR ONE DAY! That must be WRONG on a balance of only €19.58... They have sent me the calculations but I cannot make head nor tail of it. Can anyone help?? I have of course gotten a refund but that is not the point! They appear to be charging me interest on each item on the bill (i.e. a €20, €19.85, €24.95 but are not taking into account the payment I made during that month). Will scan and email the banks explanation if anyone can PM me their email address. I seriously feel a mis-calculation here!

Regards

LS
 
Check out this Key Post which will explain it.

How credit card interest is calculated. How to get an interest-free period.


Sure, email me the interest calculation. Brendan at this website.

You were not charged interest for one day. You did not qualify for an interest free period, so you were charged interest on each item for as long as it was unpaid.

They appear to be charging me interest on each item on the bill (i.e. a €20, €19.85, €24.95 but are not taking into account the payment I made during that month
Click to expand...
When did you make that payment?

If your average balance was €64 for the month.
€64 @ 20% = €12.90 per year
/12 = €1.06 per month

So it looks about right.

But I would like to see the statement as I have never actually seen the calculation.
 
OK, Little Sis has sent me her statements which I reproduce here.

I am working on Budget stuff right now, so I will see about laying it out better later.


August transactions
posting date||amount|total
15 July||18|18
15 July||25|43
16 July||49.95|92.95
19 July|credit|-24.95|68
6 August|payment|-100|
summary
Pervious balance|51.58
Total transactions this period|68
Payment received|-100
New balance|19.58

Sept statement
25 aug||4.90|
2 Sept||45
6 Sept||59.81
9 Sept||14.4
9 Sept|payment|-100
13 Sept|interest|1.07
Calculation of interest on transactions

date|amount|days interest|interest
15 July|18|31days| 0.22
15 July|25|31days|0.31
15 July|49.95|30 days |0.6
19 July|24.95|27 days|-0.27
Total|||0.87
Calculation of interest on balance

Previous balance: €19.58
Interest charged: 0.24
Less credit:0.04
Net: 0.2

19.58 @ 0.0403171% @ 31 days = 0.244717
 
OK



Interest is charged on the items for as long as they are outstanding.

(If you pay in full on time, you don't get charged interest)

So you bought something for €18 on 15 July and hadn't paid for it by the date of the statement on 15 August, so you were charged a full month's interest on this.

€18 @ 31 days @ .0403171% per day = 22 cents

(It's the same for the other purchases)

At 15 August, you owed €119.58. You paid €100, so you still owed €19.58.

Between 15 August and 15 Sept you were charged 24 cents interest on this.

Brendan
 
Many thanks

Brendan

Many thanks for your detailed explanation but it still seems ridiculous, immoral and downright theft. If I am to understand you correctly, I have been charged interest on items that had been fully paid for before their due date!

Yes, I bought an item
"€18 on 15 July and hadn't paid for it by the date of the statement on 15 August,"
Click to expand...

But it was not due to be paid until September 8th. However I made payment on August 6th which totally cleared the previous balance and commenced clearing some of the purchases from the current month which were not due to be paid until September 8th. thus my balance of €19.68 can only have related to my final purchase on this bill.

As I said earlier it is not the €1.07 ... but it does truly appear to me that AIB have charged me interest on items that were not due to be paid until September 8th but which i had cleared with an early/pre-payment on August 6th.


Does anyone see my point?? Am I looking at this all wrong?

Again, many thanks ...

Regards

Little Sis...
 
I feel for you little sis, but I understand that the way they look at it is that everything is subject to interest unless you qualify for an interest-free period by paying the whole bill on time.
 
Hi Little Sis

You are looking at it wrongly. You seem to think "I have 30 days to pay this before they charge interest"

The actual rule is "You will be charged interest on this item from the day you buy it until the day you pay for it". It's exactly the same with your overdraft. If you buy something today, you will pay interest on it until it is paid for.

There is a second rule which says "If you pay your bill in full and on time, we will waive the interest".

As very few of us understand that rule, I believe that the Credit Card companies should change the way they explain it.

Rather than say

"We will give you an interest free period unless you pay it in full and on time"

they should say

We will charge you 19% interest from the day you buy it to the day you pay for it. If you pay your balance,, in full and on time, for two months in a row, we will waive the interest.

Brendan
 
Those of us who understand the rule benefit from free credit paid for by the majority who don't understand the rule.

Brendan
 
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