1

This somewhat absurd situation happens as follows.

I have paid the full balance due up to the this month.

My balance due on the statement is $150.

I return an item worth $50 after receiving the statement.

I go to pay my previous balance but I am limited by the current balance which is now $100. I pay the current balance of $100.

I now charge $200 before the closing date so my current balance is now $200. My new balance will be $200 on closing date.

Will I be charged interest during this period since I did not pay my previous balance of $150 (even though I wanted to pay it)?

Note that if I sent them a check they could not block me from paying the previous balance. They would have to accept the check. This only happens with online payments.

  • It depends on the month that received the $50 credit in their billing system. You should call them. – quid Jun 15 '17 at 18:09
  • It may depend on country, but in USA using 'push' ACH (sending from my bank, NOT 'pulling' by the card-issuer bank) I often pay more than the statement balance (because it's more convenient for me) and sometimes more than the current balance; the issuers can't prevent this and none have ever rejected or even complained about such payments. – dave_thompson_085 Jun 16 '17 at 7:29
3

It's not that ridiculous, and it's not in real time. Remember the system is built for old people, who use postal mail.

At the end of your billing period (say, May 21) you are mailed an invoice/billing statement for the charges up to this point. They give you three figures:

  • Minimum payment: $21
  • New Balance: $150
  • Payment Due Date: 6/16

The long window of time is to allow paper to travel the postal mail system, and give you some slack so you can "sit down and write your checks" twice a month instead of the day they come in.

If you pay the New Balance by the Payment Due Date, you will not be charged interest. (assuming you haven't been rolling interest all along). That's it. It's that simple. It is made simple because otherwise it gets too complicated.

It's kind of funny, returning an item doesn't count toward making the Minimum Payment (you can't make your minimum payment by returning stuff)... but it does count toward your New Balance obviously. If you had returned $50 of stuff between (in my example) May 21 and June 16, then paying off $100 squares you.

  • I am blocked from making a new balance payment in full because of the return of $50. The site is only allowing my current balance which is $100. Later before the closing date my balance goes up with a new charge. I want to pay the balance in full but the site blocks me. I am not convinced that I will pay no interest. Are you sure? – Robert Tamlyn Jun 16 '17 at 18:56
  • You are still thinking in real-time. The closing date for this billing cycle was surely sometime in May. The new balance as of this cycle (which ended in May) is $150 reduced by the $50 return. As long as you pay $100 you have paid the balance in full. The end. The $200 is irrelevant, as it is part of the next billing cycle which has not ended yet so obviously can't be billed. This is how the system has worked for 30 years, and there'd be hell to pay if cards charged consumers interest after they paid in full by the billing date. Welcome to the 20th century! – Harper - Reinstate Monica Jun 16 '17 at 19:10
  • Yes I am thinking in real time. I hope you are correct. If the credit card company ignores the return (which you assert they will not), then they will first check if I paid the previous balance (answer No) and then they will go back over the month and look at the average daily balance. Thanks for your quick answers. I will post back if I am charged interest. – Robert Tamlyn Jun 17 '17 at 20:55
  • If you don't want to chance it, force a $50 payment down their throat. You can't do it with that particular online system, but you can use push ACH or you can go back to the 20th century and mail them a check! If they receive it by the due date, it counts. – Harper - Reinstate Monica Jun 17 '17 at 21:17
  • In fact, I was not charged any interest so the answer above is correct. – Robert Tamlyn Sep 11 '17 at 20:28

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