Cedit cards + interest

[JTrader]

Hi

I'd not been getting charged interest on my HSBC credit card. I only owe £30, and haven't used the creidt card for about 4 months, but all my statements were saying "no interest was charged on this statement".

This made sense to me because, about a year ago I set up a direct debit minimum payment of £5 per month. I was told at the time, so therefore presumed thereafter, that this minimum payment ensured that you were not charged interest.
However, I've since been told by HSBC that the minimum payment only stops you being charged a fine for a late payment, and it has nothing to do with interest.
I've not been charged any interest for 6-12 months, and now that I've pointed this out to HSBC, it looks like may will remove this mystery privaledge.

It had occurred to me that if I were to have 3-4 seperate credit cards, spend up to maybe a £1500 limit on each card, and make a minimum monthly payment on each card, over the course of 25-50+ years of possible future use, I could use this to amass significant interest on funds that are in my bank account rather than funds that have been used to pay off credit card debt.
For example, on a £1500 debt, paying back £5 per month takes 300 months = 25 years. With a 5% bank interest rate in mind, over 25 years, I'd gain around £1500 by having these additional fund in my bank account.
Alternatively over 25 years, you could also keep your credit cards topped up to the £1500 limit, and this would gain you £3000 approx. over 25 years.

However, following my conversation with HSBC, it seems that this is not how their credit cards should work , but they have yet to confirm why i've not been paying interest.

My question is, is anyone aware of any credit card companies who operate like I would like, not charging interest on balances owed, as long as you make a minimum monthly payment?
Or, would a credit card company who operates like this, be a thing of dreams and fantasy?

Many thanks.

 

[Trader333]

My question is, is anyone aware of any credit card companies who operate like I would like, not charging interest on balances owed, as long as you make a minimum monthly payment?

James this simply doesnt make sense, all credit card companies will charge interest but they may have a period of time where they dont for new customers etc. I am sure you have misunderstood how this all works as the £5 minimum payment will eventually include interest. What you need to check is what the balance on the account is each month. If you are not buying anything and the amount you owe goes up then interest is being charged.


Paul

 

[JTrader]

Hi
yes due to a system error at HSBC, I'd not been charged interest over the last 12 months.
However, now that I've pointed this out to them, they have now switched interest back on at 17.5% APR.

I had to make 2 phone calls lasting 45-minutes in all 20 +25 minutes. During the first call I was on hold for about 15 minutes in all. At 20-minutes I hung up.
During the second call I registered a complanit with the supervisor about how long I'd been left on hold for during the first call.
When I received the letter saying that interest would now be added to my credit card account from now on, they also informed me that they've paid £20 into my account as compensation for the 2 phone calls I made.

 

[Jack o'Clubs]

JT,

As Paul says, I think you stumbled on one of those 'I can't believe this hasn't occurred to me before' moments, only to realise later that if it looks too good to be true... Happens to me all the time :cheesy:

If you think about it, if the answer to the UK personal debt crisis was for everyone to pay off £5 a month by d/d and to hell with the interest rates and outstanding balances, things would be a lot simpler than they are. It just doesn't work like that.

I think you just need to be grateful that HSBC had made in error in not charging you interest thus far (unless they back-date it!).

 

[JTrader]

If they did back-date it, I'd be saying tata forever to HSBC!

 

[JTrader]

Now I come to think about it, I don't know why i use HSBC anyway - they're one of the lamest banks around, from a good deal for customers point of view........

 

[Jack o'Clubs]

See this thread: it was surprisingly easy to switch and A&L have been good so far - 6.1% interest on current account credit balances (up to £2.5k), or 0% overdraft for first year, for a start.

http://www.trade2win.com/boards/showthread.php?t=22121

 

[Splitlink]

James this simply doesnt make sense, all credit card companies will charge interest but they may have a period of time where they dont for new customers etc. I am sure you have misunderstood how this all works as the £5 minimum payment will eventually include interest. What you need to check is what the balance on the account is each month. If you are not buying anything and the amount you owe goes up then interest is being charged.


Paul

Banks do, sometimes, make mistakes. A friend of mine had a broadband connection with her Spanish bank. No phone charges for two years! It was only when she moved that her bank charged her from the new connection. When they did, she did not like the price and changed accounts!

These things never happen to me!

Split

 

[Jack o'Clubs]

Banks do, sometimes, make mistakes....
These things never happen to me!

Split

I've lots of experience of banks' mistakes! Sadly though, none in my favour...

 

[JTrader]

A +L are good, its just having to pay the minimum monthly amounts in to your account to get the higher interest rate,, and other small print that i don't like.
I've got an Nationwide investdirect account, which offers a medium/high interest rate for an instant access account with cashcard, M&S ISA, and premium bonds .

 

[JTrader]

Now I come to think about it, I don't know why i use HSBC anyway - they're one of the lamest banks around, from a good deal for customers point of view........

Now I remember why I'm with HSBC - they were one of the only banks able to give me a cash card at 16, and I've just stayed there ever since!
HBOS was just next door, and they have been considerably better in the time since IMO

 

[JTrader]

A +L are good, its just having to pay the minimum monthly amounts in to your account to get the higher interest rate,, and other small print that i don't like.
I've got an Nationwide investdirect account, which offers a medium/high interest rate for an instant access account with cashcard, M&S ISA, and premium bonds .

I've had premium bonds for several years, and have had a few fairly big prizes along the way, as well as regular £50 and £100 prizes. However, besides giving me something extra to look forward to each month - the prospect of a big win - overall, I'd have been a bit better off with this money in a National Savings account, and National Savings accounts don't pay good interest rates.
Therefore, so far, I could have made considerably more money with the the premium bonds capital, through interest earned in a good savings account - but then there's no monthly prize draw in a savings account.......