Thu, 18 May 2006

Credit Card Trap

Alli was two days late paying our VISA bill two bills ago. Sure enough, our last bill arrived with a $77 charge: having overrun the interest-free period, we got charged the full amount, of course.

But Ben Elliston pointed out something I hadn't fully grasped: if you keep using the credit card, you'll never get your interest-free period back. First the billing cycle ends, then bill arrives and you pay it, but if a charge comes in between those two dates, you never actually reach 0 balance, and hence your interest free period is never reset. You're on the treadmill.

I assumed I'd have to push it into credit to stop the cycle. I called ANZ (ie. India, which was perfectly fine and fluent) to explain we'd been late with a payment and ask if we were still being charged interest. Conversation went roughtly "Yes, and I'll just revert that now." "So, how much do I have to pay to put it into credit and clear it?" "No, I'm just removing the interest now" "So I won't ever get another interest charge?" "That is correct."

Obviously, the call center works from a flowchart. Equally obviously, they're used to irate customers who've received their second interest bill after having paid off "in full". But if possible, that just makes this whole trap seem even more slimy.

[/self] permanent link