Credit card interest question...

[Super_Geo]

If I have $10,000 on my monthly statement and I pay $9900 of it by the due date, does interest get charged on the full $10,000 (despite the fact that I paid $9900 on time), or just the remaining $100?

I've always thought I'd pay on the full $10,000, even if you pay 99% of it down...

[syeve]

From what I understand, if you make the payment before the due date, you pay zero interest. Maybe I'm wrong? I hate credit cards
:)

[Super_Geo]

Originally posted by syeve
From what I understand, if you make the payment before the due date, you pay zero interest. Maybe I'm wrong? I hate credit cards
:)

What happens if you don't pay the full amount. Like in the example above... if you pay 99% by the due date, do you have to pay interest on 100% of the original statement or just the remaining 1%?

[abyss]

If you pay by the due date you don't get charged interest. Only if your balance goes outstanding do you start to pay interest on that amount.

[anarchy]

But Geo's asking what are you paying interest for.

Ie. He racks up $10,000 on credit card. Receives bill, has to pay it off by May 1st. He pays off $9,900 by May 1st, but still has an outstanding balance of $100.

His question is, does he pay interest on the $100 outstanding, or the $10,000 full amount?

My understanding is that it's just on the $100 outstanding.

[syeve]

^^reading owned me. Yes, he would only have to pay on the $100 outstanding. Again, this is what I understand concerning CC's

[gran turismo]

You only pay interest on the balance outstanding. In your example, it would be interest on the $100.

[anarchy]

Originally posted by syeve
^^reading owned me. Yes, he would only have to pay on the $100 outstanding. Again, this is what I understand concerning CC's

You disgrace the real Super Nintendo ChaLmers.

haha jk

[Amysicle]

My BMO mastercard says something sightly different. http://www3.bmo.com/mosaik_images/paymentsandinterest_E.pdf

Maybe call your card company up and see how they charge interest?

[syeve]

Originally posted by anarchy


You disgrace the real Super Nintendo ChaLmers.

haha jk


:rofl: Tell Rage2...this one is on him!!

[rage2]

Originally posted by syeve
:rofl: Tell Rage2...this one is on him!!
I was told to add exactly that. Cut and pasted. Not my fault it was spelled wrong to begin with! :rofl:

[Antonito]

Originally posted by Amysicle
My BMO mastercard says something sightly different. http://www3.bmo.com/mosaik_images/paymentsandinterest_E.pdf

Maybe call your card company up and see how they charge interest?

Yeah I think it's a matter of what agreement you sign

Google to the rescue: link (http://www.cbc.ca/consumers/market/files/money/credit/partial.html)

[syeve]

Originally posted by rage2

I was told to add exactly that. Cut and pasted. Not my fault it was spelled wrong to begin with! :rofl:

Owned twice today :nut:

*Mental note* don't blame Rage for anything...he will win.

Oh and :hijack: :D

[autumnrain]

oh wow.. does anyone know a card THAT DOESNT do this?

[chadnixon]

.

[Doozer]

Originally posted by Antonito

Google to the rescue: link (http://www.cbc.ca/consumers/market/files/money/credit/partial.html)
Yup, my CC company (CIBC) says something similar:



On the day we prepare your current monthly statement, we determine whether we received payment for your full Balance from your prior month's monthly statement by the payment due date. If we did not, then all New Purchases appearing on your current monthly statement will be subject to interest. If we did receive payment for the full Balance from your prior month's monthly statement by the payment due date, then all New Purchases on your current monthly statement will not be subject to interest, as long as we also receive payment for the full Balance on your current monthly statement by the payment due date.

Interesting, and it's something I'm sure lots of people (including myself) didn't know.

[gkAeris]

http://www.cbc.ca/consumers/market/files/money/credit/partial.html

[Doozer]

Originally posted by chadnixon
Most major companies usually have a 30 days no intrest. So for example if you were to rack up 10g, you will not get charged any intrest on it for the first 30 days. The actual amount due is only a percentage of the total cost. On your first bill you might owe a hundred bucks or somthing...
It appears you're only partly right. If you don't pay every penny, then you get charged interested from the date of purchase, on the whole amount outstanding. Which (for my VISA) is 2.1%.

So, to the OP, if I racked up 10G on my card, and I paid $9999 of it, I'd still owe the bank $1 of the original purchases, plus $210 interest. PLUS I think I'd automatically be paying interest on subsequent purchases until the whole balance was paid in full for 2 consecutive months.

So, in summary, it's the same old-same old with credit cards - they're are handy if you pay them off in full, immediately. Otherwise, they WILL get lots of your money.

[syeve]

Originally posted by gkAeris
http://www.cbc.ca/consumers/market/files/money/credit/partial.html

Ugh...exactly why I hate CC's. That is BS

[anarchy]

Originally posted by syeve


Ugh...exactly why I hate CC's. That is BS
Pipe down Chamers.


Just kidding. This thread has actually turned into a very educational one. I'm trying to find the terms and conditions for my RBC Avion Platinum Visa but goddamn is it hard to find.

[Antonito]

Originally posted by anarchy

Pipe down Chamers.


Just kidding. This thread has actually turned into a very educational one. I'm trying to find the terms and conditions for my RBC Avion Platinum Visa but goddamn is it hard to find.

Haha good luck, there are lawsuits based on the fact that the fine print in the terms and conditions are not understandable to anyone, even economists with PhDs

[rc2002]

Fine print tells all. I hope you didn't throw away the agreement from when you first signed up. That contains indispensable information and will be different for each credit card.

I had to look it up when I was doing balance transfers at 0.97%. I thought it was a good deal - the CC company is going to loan me money at 0.97%.

But then I figured outu that it goes first to transfers, then to interest, then to fees, then to the principal amount. So if you make any purchases after the balance transfer, you have to pay everything off to not get dinged with high interest.

The guys on the phone are useless and couldn't tell me that. I had to actually read the fine print to figure it out.

[TomcoPDR]

Originally posted by rage2

I was told to add exactly that. Cut and pasted. Not my fault it was spelled wrong to begin with! :rofl:



Originally posted by syeve


Owned twice today :nut:

*Mental note* don't blame Rage for anything...he will win.

Oh and :hijack: :D


:rofl:

That's why I always have credit balance in my CC account, even an over payment of $0.50... Couple years ago I was away for 3-4 months, thinking before I left I've made the amount (by due date), but during payment transit (snail mail), the due date elasped... and I ended up with $30-50 worth of interest when I got back. So I always just pay a little extra.

[googe]

Holy crap! I had no idea they do that. What a scam. Been using cards for years and never noticed.

[CrAzYkL3PtO]

id say u only pay interest on the $100 outstanding, thats how my future shop credit card is.

[bashir26]

I've had my bmo mastercard for two years now and never have paid interest. Example I have a credit line of $2000(student) and owe about $1000. I pay about $500 on that $1000 and I don't get charged interest on the remaining $500.

[googe]

Originally posted by bashir26
I've had my bmo mastercard for two years now and never have paid interest. Example I have a credit line of $2000(student) and owe about $1000. I pay about $500 on that $1000 and I don't get charged interest on the remaining $500.

that makes no sense

[bashir26]

^ I know, it just happens I've never been charged interest in two years no matter what my balance is lol

[max_boost]

They'll charge you interest where ever they can. Definitely read the fine print as interest is calculated daily.

So you will pay interest on the $9900 (# of days posted to your account) + interest on any future purchases.

IF YOU DON'T PAY OFF THE BALANCE IN FULL, YOU LOSE THE BENEFIT OF THE GRACE PERIOD ON YOUR PURCHASES. :D

[max_boost]

Originally posted by richardchan2002
Fine print tells all. I hope you didn't throw away the agreement from when you first signed up. That contains indispensable information and will be different for each credit card.

I had to look it up when I was doing balance transfers at 0.97%. I thought it was a good deal - the CC company is going to loan me money at 0.97%.

But then I figured outu that it goes first to transfers, then to interest, then to fees, then to the principal amount. So if you make any purchases after the balance transfer, you have to pay everything off to not get dinged with high interest.

The guys on the phone are useless and couldn't tell me that. I had to actually read the fine print to figure it out.

Yes! Be very careful with the balance transfers. It's a great way to consolidate for the 6/9/12 month offer BUT make sure you use it for the transfer only. Do not use it for purchases after!

Transfer 1%
Purchases 18%

Any payments will go towards the 1% and not the 18%! That is, until the balance on the 1% rate is paid off first!