A recent incident involving a Halifax credit card customer has shown just how much consumers could end up paying in interest if they fail to clear their credit card balance in full each month. Industry officials claim that the number of people that clear their balances in full each month has fallen over the past couple of years, and APACS, the payment clearance service, has said that strained household finances and rising living costs could result in the situation getting even worse.
One Halifax credit card customers said that he ran up a bill of over £5000 on his credit card after paying for flights to Hong Kong, but he then wrote a cheque to pay off this credit card bill and sent it off. However, he overlooked a 62p outstanding payment, and due to this was charged interest on the whole lot, with interest of over £60 being added to his credit card bill.
He said: ‘It was a genuine mistake. I thought I had cleared my balance and when I received my next bill I thought at first someone else had used it. Then I noticed it was an interest charge - on 62p. When I called Halifax to protest, I was told that it was standard practice to charge interest on the whole amount if you don’t clear your balance and there was nothing they could do about it.’ He added: ‘I was so furious I rang back again a couple of days later and fortunately spoke to someone else who realised it was a mistake and agreed to waive the charges. But it made me realise just how credit card companies make their money.’
A Halifax credit card official said: ‘Those are our terms and conditions so the first member of staff was right, but the second person Mr Baratta spoke to took a more pragmatic approach and I am glad the charge was waived.’