MBNA Amazon credit card INTEREST charge?

pca1987 wrote: ↑ Hey guys, I have only owned credit cards from CIBC and Capital one (costco). I dont think they ever charged interest rates if you made the full statement payment on time.

However, on this new MBNA Amazon credit card I was charged a few dollars and the description was 'INTEREST CHARGE'. This charge happened on June 09, and the May statement was fully paid as soon as the statement was posted.

Looking at their website, I found this:


From my understanding, they charge you interest on all payments for as long as they are in your balance, regardless if you make the full statement payment or not? Is this really different than other credit cards? I have never seen interest charge in any of my credit cards, and I only make payments when the statement is posted. Or am I missing something here?

MikeMontrealer wrote: ↑ Were your charges coded as purchases or cash advances? Cash advances are charged daily interest from the moment they hit the card.

MikeMontrealer wrote: ↑ Were your charges coded as purchases or cash advances? Cash advances are charged daily interest from the moment they hit the card.

pca1987 wrote: ↑ I am not sure, it doesn't show up in the statement. The columns are 'transaction date', 'posting date', 'card holder', 'description' and 'amount'. I don't see a way to see more detailed statement.
I assume all my transactions should be purchases rather than cash advances, as they are mostly amazon purchases and I rarely I use it anywhere else.

I'll call them to get some clarification, apparently this is not normal at all according to what you guys said. Thanks for your input

pca1987 wrote: ↑ I am not sure, it doesn't show up in the statement. The columns are 'transaction date', 'posting date', 'card holder', 'description' and 'amount'. I don't see a way to see more detailed statement.
I assume all my transactions should be purchases rather than cash advances, as they are mostly amazon purchases and I rarely I use it anywhere else.

I'll call them to get some clarification, apparently this is not normal at all according to what you guys said. Thanks for your input

MikeMontrealer wrote: ↑
It'll be in the Interest Information section of the statement, where they break it down by BTs, Purchases, and Cash Advances.

aweawea wrote: ↑ This. Look at your PDF statement, not the online transaction summary.

MikeMontrealer wrote: ↑ It'll be in the Interest Information section of the statement, where they break it down by BTs, Purchases, and Cash Advances.

pca1987 wrote: ↑ Thanks, I completely missed the PDF option.
Now I see the interest breakdown, there are 3 categories: Balance Tranfers and Access Cheques, Purchases and Cash Advances. 22.99%, 19.99% and 22.99% respectively.

My INTEREST CHARGE is under "Purchases" and I have no clue why.

On May statement I see (fictional value): Balance Subject to Interest Rates: $100 / Interest Charges by Transaction type: $0.
On June statement I see: Balance Subject to Interest Rates: $100 / Interest Charges by Transaction type: $3.60 - fictional values but correct %, they charged me 3.6% of the balance subject to interest.

I imagine if this was due to paying less than the statement, it would be under 'Balance transfers'? I am not sure what 'Balance Subject to Interest Rates' means if it is not a balance transfer. Anyone know?

Thanks again guys


edit: I see this in the statement, but it's not very clear what is the grace period and why in one balance it was changed and in another it was not. Quite confusing, I think calling is probably the only way to understanding this?

Eleventeen wrote: ↑ All credit cards issued in canada must provide a minimum of 21 days interest free grace period. EG: The period after they issue the statement, that you have to pay, and if all purchases are paid in full - you are charged no interest. It's the law and MBNA certainly follows it.

Except quebec, quebecs credit card laws make no sense.

FrankToronto wrote: ↑ Per my experience, I always did three things when I got a new CC: 1, Setup a pre-authorized payment/Autopay linked to my primary chequing account; 2, Set an overlimit block in case I run over the credit line and be charged for fees, especially for low CL CC; 3, for some CC issued by small banks, call them and make sure they enabled recurring pre-authorized payment (eg Netflix), E-commerce, and foreign purchase.

Autopay is very helpful to me because you never know how banks calculate on some trivial stuff. Even if sometimes banks make mistakes, as long as you pay full amount on time it won't impact your credit score anyway. And when you find something wrong, you can always claim a dispute to the bank and get your money back. However, if you pay manually, you probably forget or make a mistake on numbers at some time. It happened to me once and I setup autopay since then and never missed any payment anymore.

smartie wrote: ↑ Just curious how much money you keep in your chequing account for those auto pay while avoiding NSF charge

Thanks

FrankToronto wrote: ↑ I usually keep a cash cushion in my account: For example, I have a SmartPlus account in CIBC, which requires a minimum $6000 daily to avoid monthly fees($29.95*12, roughly $360); Considering unlimited transfers and unlimited draft, also a permanent waiver to my credit card and supplementary cards annual fees($120+$30*3=$210), I think it's a good deal to go, because during a low-interest time, such a bundle fee-waiver is more valuable if the "dead/frozen investment" is only $6000 on my account. That's part of it. Also, I have other few accounts for different direct deposits. My custom is to e-transfer these funds to my CIBC primary account. It runs well. I invest money to somewhere only if my primary account has accumulated to some level. In addition, I usually have a big picture in my brain about how much bills totally I need to pay every month and make sure there would not be a surprise "unprotected" expenditure. For example, if I see past six months and find that average monthly total bills and cash expenses (including all, mortgages, insurances, anything) are roughly 20K, then I won't transfer to investing account that month unless the chequing still has a surplus after clearing all bills and meeting the $6000 minimum in that month or my primary account has reached to about $26K to $30K before clearing bills.

For some unexpected and urgent situation, I can use my LOC for a short time.

However, for example, if you find you often have a NSF issue, I think it implies that your financial budget and management is not effective. You should redesign/rethink your cash cycle to match your bill due dates. And after a careful check, the issue still exists, it probably means your income cannot support your expenses. Then you have to earn more or cut expenses somehow.

A moderate level cash cushion can help to avoid of most NSF issues and a central financial management is a better way for chequing accounts.

You are welcome

smartie wrote: ↑ Thanks

But I meant if you need keep 6000 for waive the fee, you also need keep money on top of it for autopay, so you have to keep 6000+ your potential statement balance + cash cushion, wouldn't you constantly keep like 10k in your chequing account?

FrankToronto wrote: ↑ It is Yes and No.

I gave the example more like a static situation, but actual life is dynamic: you will pay bills on different dates during a month. Plus, if you have different income sources, they also come in at different days. Right?

So your balance is not needed to be very high.

One more thing, the $6000 you can see it as 0 because whenever you need to keep it. However, you can use these funds for sure, but the only drawback is you will be charged at 29.95 at that month unless you pay back on the same day.

As I said, we need to design and make sure cash cycle can match due dates. More importantly, I have a LOC for unexpected bills.

The normal situation is that most bills give you a payment period like a short credit, right? For example, utilities bills give you a payment due dates and I believe you have enough time to prepare your funds: for most people, income amount is predictable, and if you find you income cannot cover the due amount at deadlines, you can figure it out before deadlines. I have a LOC and I believe I can use it one day if my cash is expected to run out.

If you receive a bill and you estimate that all your income cannot cover the bill. That means you are living on credit and it is dangerous. If not, just align your cash cycle to your due dates. That should work good.

smartie wrote: ↑ I thought auto pay is leave it and forget it scenario. But it seems you still need check statements and move around the money?

FrankToronto wrote: ↑ No I don't need to, because when I have a direct deposit coming in, it always follows an Interact notification email. Then I will transfer it right away if I am not busy. Never missed and I never checked my e-statements because banking App is able to trace your all income and expense, chequing, saving, investing, credit accounts at one portal. You can just pick anytime a week to have a one-minute scan on all accounts. That's it. No statement no matter electronic or paper. Mobile apps can solve everything. They are more prompt and more informative. (Apps are able to show pending transactions which can help detect any fraud transactions earlier; Plus, it can tell you more information on each transaction: merchant category, place, etc.) So I only need to care about statements when I need to submit for verification. Due balance and due date can be easily found or seen on banking Apps.

I make auto-pay for every bill ( CC bill, Mobile Phone, and anything I can except utilities) I pay utilities via CT Triangle WE MC for earning some CT money.