Help with Credit Card Interest

[Krypt0n1te]

Dear MyBB and financial guru's

Please help me out here....

My wife has a Discovery Credit card (underwritten by FNB), I have a card linked to her account.

Discovery's FAQ's can be found here... https://www.discovery.co.za/portal/individual/card-faqs

Around 5 months ago we were charged interest on the card which I thought impossible at the time however I decided to follow a different route of payment to avoid being charged interest again.

According to the FAQ there is up to 55 days interest free, which includes a 30 day spend and 25 day repayment period. I decided to make 100% sure that every single purchase to that card is settled within an absolute maximum of 21 days. So if I buy something today that purchase MUST be settled within 21 days.

Everything went well for the past 4 months without being charged a single cent interest....However....

Today my wife receives her statement with an amount of R484.51 interest charged. Nothing changed from the previous months, payments made exactly the same. I make payments at least weekly at max maybe every 1.5 weeks but again to highlight...No purchase were on the card longer than 21 days before being settled.

Am I missing something vital here?
How do they calculate interest?
Why were no interest charged for the past 4 months but suddenly last month without changing anything they charge interest?

Please help me out here.

Cheers

EDIT: I am willing to dissect each statement fully if someone can help me with this.

 

[Dark Agent]

You need to settle it in full.
Let Say your statement date is 9th of Every month.

What I do:
On the 11th I Buy
On the 23rd I buy
........ many times more making sure not to do transfers or cash
On the 7th I Buy

Now I need to make sure on the 8th that all purchases from 11th to 7th are paid in full, making sure the balance is positive R0.01 before new statement date. Worked for 9 months(I stop paying full amount due to financial stress).


What most people do:
They take items 1st month like I do above. But Set the payment as settle in full automatically. This 9th Statement date, 25th is Payment Date(Full Amount Paid as per statement).

I tried both, but lately I always go over 55 days and pay minimum installment.

Question is did you make transfer out or cash withdrawals. If not you should dispute it!

 

[ele33]

You have to settle the full amount as per your monthly statement to avoid interest.

If you don't settle in full, or withdraw cash you'll be charged interest.

 

[Krypt0n1te]

Thanks for the answer, I think I understand what you say.
Nope, absolutely no cash withdrawal nor transfer.

Wife logged a query and I'll advise on the outcome.
I still feel that if every single purchase on that card is settled within 21 days that they can't charge interest.

 

[Dark Agent]

Thanks for the answer, I think I understand what you say.
Nope, absolutely no cash withdrawal nor transfer.

Wife logged a query and I'll advise on the outcome.
I still feel that if every single purchase on that card is settled within 21 days that they can't charge interest.

No Problem. First 4 months I was also kept on getting charged.

On the website:
When is interest charged on my account?
You must wait until your statement closes before making payment. If you do not pay the full outstanding amount on or before the due date shown on your monthly statement, you will be charged interest. The interest will be charged from the date of each transaction on your account, on both the balance reflected on your monthly statement and on any new purchases made on the card. You will lose the interest-free period on the new purchases.

 

[Krypt0n1te]

You have to settle the full amount as per your monthly statement to avoid interest.

If you don't settle in full, or withdraw cash you'll be charged interest.

Thanks, let me take the following example. In this case, let's asuume my settlement date or "Pay before date is the 25th of the month. Let's assume I buy my wife a Stand Mixer for R10k on the 23rd or the month. Must that R10k then be settled with the rest of the months purchases even though purchase were made only 2 days before" Pay before" date?

 

[HavocXphere]

Surely you'd only get charged interest on the portion that you didn't settle? Would be stupid if you get charged the full amount because it's a couple cent off

That's the way my cards work anyway...

 

[Krypt0n1te]

No Problem. First 4 months I was also kept on getting charged.

On the website:
When is interest charged on my account?
You must wait until your statement closes before making payment. If you do not pay the full outstanding amount on or before the due date shown on your monthly statement, you will be charged interest. The interest will be charged from the date of each transaction on your account, on both the balance reflected on your monthly statement and on any new purchases made on the card. You will lose the interest-free period on the new purchases.

Thanks. Read it 15 times and never understood (believed) that it worked like that. From now I'll use the card for the convenience and surely not because I thought every purchase can lay there for 21 days!

 

[chrisc]

A few years back I had a similar problem. After a lot of to and fro, the only way to sort it out was to specify that the full balance was paid by direct debit on the day it was due. There was no problem after that

 

[Krypt0n1te]

Surely you'd only get charged interest on the portion that you didn't settle? Would be stupid if you get charged the full amount because it's a couple cent off

That's the way my cards work anyway...

No Havoc, these damn fools have a nice policy where they klap you on everything, that was on a roughly R24k monthly spend.

 

[HavocXphere]

No Havoc, these damn fools have a nice policy where they klap you on everything, that was on a roughly R24k monthly spend.

Ouch that sucks. Mine def wasn't like that.

 

[Krypt0n1te]

A few years back I had a similar problem. After a lot of to and fro, the only way to sort it out was to specify that the full balance was paid by direct debit on the day it was due. There was no problem after that

Just realized that! Sad thing is I sit with an account full of money and then you think you'll try and save a couple bucks and then they klap you with 2 cases of beer worth of interest!
Won't happen again.

Get statement... Set auto payment for full amount a day before due date. Bob's your uncle, no 21 day rolling amount calc's anymore!

 

[ele33]

Just realized that! Sad thing is I sit with an account full of money and then you think you'll try and save a couple bucks and then they klap you with 2 cases of beer worth of interest!
Won't happen again.

Get statement... Set auto payment for full amount a day before due date. Bob's your uncle, no 21 day rolling amount calc's anymore!

Since you say Discovery is linked to FNB, maybe you have the option to setup an auto payment of the full amount by the due date.

Works well on FNB and never charged any interest. I just ensure the amount as per the statement is in my account by the due date.