Premature celebration

Umm, so I think I was a little premature in celebrating the end of  my credit card debt. When I logged into my account tonight there was a -17.17 where there had previously be a 0.00.

Now I am no good with figures, in fact it would be fair to say I am mathematically challenged and may even have mild discalculia, but I'm pretty sure 0 x 14.94% = 0. So how did Westpac make it equal $17.17?

To find out why I actually read my statement*. This didn't explain anything except it did reveal that I had been paying a whopping 19.24% interest on cash advances and 14.24% on purchases and the outstanding sum of $17.17 was made up of:

25 Jul 2010 INTEREST CHARGES - CASH 16.12

25 Jul 2010 INTEREST CHARGES - PURCH 1.05

I again have to admit that I hadn't realised the whopping rate on cash advances and therefore the true cost of my credit card debt. I'm probably not alone in this.

I  then recalled an article I read a couple of months ago called "Ambushed by card charges" (all these reading more widely is slowly paying off!) by Lesley Parker, 17 March 2010. The articles makes the following very helpful points about credit card interest charges: 

* Most credit-card companies will charge interest back to the purchase date if you pay late.
* Most will charge interest on the full balance, even if you pay part of your bill.
* If you don't pay on time, most will cancel your interest-free days until you clear the balance.
* At the end of a balance-transfer deal, anything left over may be treated as a cash advance.
* If you think an interest charge is unfair, ask your card provider to reverse it.

If I understood the article correctly, I still got charged the interest on a nil balance because of something to do with the statement cycle (which in this case ran from 24 June to 25 July). At the start of the statement cycle I had $1,876.13 outstanding. What the statement neglects to tell me is how much of this is the result of a cash advancement or from purchases. Now, because of way many banks apply interest charges (apparently there is no consistency nor any governance to say which method is right or wrong), I was either not given any credit for partial repayments or alternatively, because I paid less than the full balance outstanding, the interest has been calculated daily on the outstanding balance from the date of the original transactions.

That's pretty unfair really.

I might go and have a chat with my bank tomorrow.

 

 

*Admission - my aversion to checking my bank account extended to reading my credit card statement. It's so easy to avoid when they are electronic and you have to take positive steps to log in, open it and read it. When it arrives in the mail, it's so much easier to rip open and read.