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 plus any monthly Purchase Plan instalments in full by your payment due date: 

  • we won’t charge interest on purchases or transactions made in foreign currencies that you’ve made since your last statement
  • we’ll only charge interest on outstanding standard balance items (including purchases), purchases on promotional rates, and non-Sterling cash transactions included in your current statement balance up to the date of your current statement

We charge interest on all Sterling cash transactions from the date they’re added to your account to the date you pay them off. This will always apply, even if you pay your total outstanding balance in full by the payment due date.

If you don't pay off the whole balance each month on time, excluding any promotional balances, you will be charged interest on new purchases from the date the transaction appears on your account.

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