Personal Finance

***What is PURCHASE INTEREST***

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  • Aug 26th, 2010 11:44 am
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Deal Addict
Nov 6, 2007
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***What is PURCHASE INTEREST***

Does anyone know what is Purchase Interest on the visa card statement? I just checked my Royal Bank visa card statement online and it showed a charge of that. I didn't owe any money at all cuz I always pay everything on time...no idea what it is. Please help.

thanks
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Apr 16, 2006
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Aritzia wrote:
Mar 25th, 2008 11:15 pm
Does anyone know what is Purchase Interest on the visa card statement? I just checked my Royal Bank visa card statement online and it showed a charge of that. I didn't owe any money at all cuz I always pay everything on time...no idea what it is. Please help.

thanks
Royal Bank Sucks Balls.

One of the transactions could have been classified as a cash advance for some reason...or you may not have paid your previous month's bill in full by accident.

Call them and ask - it's the only way you'll find out for sure.
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Aug 12, 2007
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Octavius wrote:
Mar 25th, 2008 11:22 pm
Royal Bank Sucks Balls.
So, credit cards from other banks don't charge purchase interest? You and Adam "the man" should really get together and collaborate on an informative essay about banks.

Okay, to answer the original question, I believe purchase interest is interest charged on credit card purchases not paid in full, by the due date. Maybe this happened if you paid your credit card on or just before the due date, and it didn't get processed in time. I'm so cautious. I always set up my payments 5 business days (7 days in total) before the due date. I don't want to get stung!
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May 15, 2007
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Aritzia wrote:
Mar 25th, 2008 11:15 pm
Does anyone know what is Purchase Interest on the visa card statement? I just checked my Royal Bank visa card statement online and it showed a charge of that. I didn't owe any money at all cuz I always pay everything on time...no idea what it is. Please help.

thanks
YYZFA has it correct about Purchase Interest...I use to work for a credit card company and there are various ways how you could have been charged Purchase Interest...Although you say you paid on time it is possible that you did not actually meet the statement date or didnt actually pay the FULL statement balance on that date...if you are short by even $0.01 then they will hit you for the FULL purchase itnerest for the period regardless of how much you paid (anything less then precise dollar amount of the statement balance).

Another thing is that if you say miss a payment (or was short) from the previous statement then even if you pay the full statement balance in the following month you will STILL see purchase interest that represents the residual of the previous statement. You'd therefore need to pay statement balances in full for two consecuitive months to stop seeing purchase interest.

In short, as yyzfa said, you need to schedule payments via your bank (electronic payment) at least 3 biz days in advance (mine is 4). Most banks also have an ability to set up scheduled payments (for fixed amounts, min amounts, and statement balances) which is convenient to set it up to pay on the day it is due...this is good so that you can have even more time for your money to sit in your bank before it is auto-withdrawal (can earn more interest)--i have always thought of doing this but have been too much of a scaridy-cat thinking that the credit card would forget to do it for a month.
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Octavius wrote:
Mar 25th, 2008 11:22 pm
Royal Bank Sucks Balls.
I've been banking with RBC for over 15 years, I got a excellent relation with them, I even got them to waive the $13 chequing fee. I don't know why you hate them so much, but in my book they have the best customer service in the industry.
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May 15, 2007
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Aritzia wrote:
Mar 26th, 2008 1:00 pm
You guys were right. My payment was late by one day. They got it on March 21 but it was due on the 20th. The interest is crazily HIGH...learned my lesson. Will always set up my bank payment at least a week ahead. thanks
A little secret of credit card companies is that you can ask the CSR if you can have the interest charged waived for this one time and say that you've been a good customer and never been late....if they say no then hang up and call again to get another CSR....sooner or latrer you will always get one taht will waive the charge....i remember always waiving fees and interest for people ONLY if they asked me to... :lol: ...and they always sounds like they won the lottery and i always felt like robin hood. CSR people always want to waive fees for calling customers when they asked because we always felt we never wanted to disappoint them....it was freaky how many of us CSR were like that....it was rare to find those hard-asses who refused to waive anything....it got so bad because we all kept waiving that they wrote new software to prevent us from doing it but many of us found ways around and kept doing it.
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Sep 22, 2007
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Aritzia wrote:
Mar 27th, 2008 10:21 am
Oh my...it turned out that they made a mistake. I messaged the CS online and I got a reply.

"I saw that we billed you last month $124.00 and you paid back $120. It might have been just an honest mistake, but we consider this as a partial payment. This partial payment generated interest."

So basically I was charged $2.80 for not paying $4 back...that's a bit crazy. Not that $2.80 is a lot but it's a lot comparing to I only owe them $4.
Unless you pay the bill in full, you owe interest on the full amount.
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Aritzia wrote:
Mar 27th, 2008 10:21 am
Oh my...it turned out that they made a mistake. I messaged the CS online and I got a reply.

"I saw that we billed you last month $124.00 and you paid back $120. It might have been just an honest mistake, but we consider this as a partial payment. This partial payment generated interest."

So basically I was charged $2.80 for not paying $4 back...that's a bit crazy. Not that $2.80 is a lot but it's a lot comparing to I only owe them $4.
Re-read the message. They are saying YOU made a mistake by only paying $120 instead of the full amount due of $124. As other posters have noted, if you don't pay in full you get charged interest on the whole $124. That's the way they all work.

But in the end this thread is about $2.80?
Newbie
Aug 22, 2010
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Midwest
I have a Visa card through a different bank and last month the "purchase interest" came up on my statement $16 worth. I ALWAYS pay in full and on time - my statements prove that. I have never had a balance and I have had this card for 5 years and nothing like this has happened before. I looked at my statement for this month and it happened again. Weird thing is though my total purchases was higher but my purchase interest charge was less than last month. I don't feel like calling people and being on the phone for hours while they tell me its some new rule in fine print. I'm getting a different card.
Jr. Member
Mar 8, 2009
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The interest has been charged in the same manner by most banks for several years in 2 cycles so you see interest until you pay the second statement. Interest for the first missed statement and the remaing interest on the prev months purchases. Its not that complicated you just have to pay on time.
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Nov 11, 2008
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Miss Patty wrote:
Aug 23rd, 2010 1:30 pm
I have a Visa card through a different bank and last month the "purchase interest" came up on my statement $16 worth. I ALWAYS pay in full and on time - my statements prove that. I have never had a balance and I have had this card for 5 years and nothing like this has happened before. I looked at my statement for this month and it happened again. Weird thing is though my total purchases was higher but my purchase interest charge was less than last month. I don't feel like calling people and being on the phone for hours while they tell me its some new rule in fine print. I'm getting a different card.
You can jump to another credit card, but at the end it's the same. I don't know any other credit card with a different setup on how they charge interest.
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May 2, 2009
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Miss Patty wrote:
Aug 23rd, 2010 1:30 pm
I have a Visa card through a different bank and last month the "purchase interest" came up on my statement $16 worth. I ALWAYS pay in full and on time - my statements prove that. I have never had a balance and I have had this card for 5 years and nothing like this has happened before. I looked at my statement for this month and it happened again. Weird thing is though my total purchases was higher but my purchase interest charge was less than last month. I don't feel like calling people and being on the phone for hours while they tell me its some new rule in fine print. I'm getting a different card.
So rather than calling them to straighten out what is either a mistake in their system, or a mistake on your part (which will likely continue with the new card, if you change), you're going to go through the hassle of applying for a new card?
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