Credit Card Interest - how is it charged?

Understanding interest

How is credit card interest charged?

When we charge interest (and when we don’t)

As long as you pay your main balance (excluding any promotional balance with a 0% interest rate) plus any instalment plan payments due for that month in full by your payment due date, the following will apply that month:

  • We won’t charge interest on new transactions that have been added to your account since your last statement.
  • We will only charge interest on your outstanding balance from your last statement up to the date of your current statement.

We work out how much interest we charge each month using a simple interest rate and your interest is calculated on a daily basis. Any interest charges are added on the date we produce your statement.

Please refer to your terms and conditions for more information about your interest, including simple and compound rates.

How we allocate payments

If a payment you make is less than your total outstanding balance as shown on your statement, we’ll use it as follows:

  • if you have any Purchase Plans on your account, to make any Purchase Plan instalments due for that month
  • to reduce your main balance (your statement balance less any Purchase Plan balance). We’ll start with the balances charged at the highest interest rate first and then reduce the lower-rate balances. If you have more than one promotional balance at the same interest rate, we’ll use your payment to reduce the balance with the promotional rate that ends first
  • if you have any Purchase Plans on your account, to reduce any remaining Purchase Plan balance. If you have more than one Purchase Plan, we’ll use your payment to reduce the Purchase Plan that ends first
  • if the standard balance includes default fees, we will pay those off before the rest of the standard balance

Our Repayment Calculator helps you pay us less in interest

The longer you take to pay off your balance, the more interest you’ll end up paying. Just by paying a little more each month, you could clear your balance sooner than you think, and pay less in interest.

Enter your current details into our Repayment Calculator and see the difference a few pounds extra can make.

Repayment Calculator