Personal Finance

TD Credit Card charged interest on paid balance

  • Last Updated:
  • Jun 8th, 2016 12:31 am
Tags:
None
[OP]
Jr. Member
User avatar
Aug 26, 2014
130 posts
55 upvotes
Markham, ON

TD Credit Card charged interest on paid balance

I have a TD First Class Infinite credit card, last month I put about $3620 of travel charge on it, and PAID $3500 before the statement due date.

I carry $120 balance forward in order to redeem travel points against it (and expect a small interest charge), then I would cancel the card and close the account, that was the plan.

Yesterday, TD put a $40 interest charge on the $120 balance. I call in and speak with an agent, she said that if the balance is not entirely paid off, then the interest will incur from the day the purchase is made. Mind you it's not a charge card like one of those Amex cards, it's a credit card.

However, at the end, I was able to have it reversed so no interest incurred at all.

We have had a few YMMV Your-mileage-may-vary cases with both TD and MBNA.
19 replies
Deal Fanatic
Nov 24, 2013
6214 posts
2965 upvotes
Kingston, ON
I forget the year, but TD (and probably most Big 5) changed their credit card policy a few years back to where interest accrues from day of purchase, and is only "waived" if the statement balance is paid in full in the grace period.

Say you charged $3,620.00 all at once on May 1, interest begins accruing that day. Say your statement date was May 10, payment due date May 31. You paid $3500 May 31, but not the full balance. Interest accrued at 0.054767% per day for 30 days, times average daily balance of $3,620. That's ~$59.48. Even though you paid most of the statement, theoretically that's what you'd be on the hook for, per their T&C.

(Some banks' calculations can get pretty esoteric. My numbers are just an example).
Deal Fanatic
Jan 21, 2014
5473 posts
2992 upvotes
Cap One does the same. Last time I misread the balance and paid incorrect amount, so I ended up with $1.XX left on the balance. next statement, I was charged more than $1.XX in interest. That of course wasn't from $1.XX, but the full balance. Thanks goodness it was only a small one (less than $200)
Newbie
User avatar
Oct 18, 2013
19 posts
8 upvotes
Beaconsfield, QC
Mike15 wrote: I forget the year, but TD (and probably most Big 5) changed their credit card policy a few years back to where interest accrues from day of purchase, and is only "waived" if the statement balance is paid in full in the grace period.
It must have been quite a while back because that's the only way I've ever known it to be processed.
Deal Addict
Oct 24, 2009
2126 posts
715 upvotes
As far as I know, if you don't pay the full balance by the due date, they'll charge you interest on the full balance.
Member
Oct 16, 2014
221 posts
137 upvotes
Moncton, NB
Why carry the balance in the first place? Even if you planned on using points to offset that expense, you would have been better paying it off, then redeeming points when you have them, and finally ask TD to refund you the credit balance by cheque. <img src="images/icons/new/smilies/thread-wink-16.png" border="0" alt="" title="Wink" smilieid="4" class="inlineimg" />
Deal Fanatic
Nov 24, 2013
6214 posts
2965 upvotes
Kingston, ON
KrolArtemiza wrote: It must have been quite a while back because that's the only way I've ever known it to be processed.
My memory may be faulty but I think this was '10 or '11, and before the interest accrued from the statement date rather than the transaction date. May be wrong.
Deal Fanatic
User avatar
Nov 23, 2005
8686 posts
4886 upvotes
It is plain and simple. You get a 21 day grace period if you pay your balance in FULL. Otherwise, you will be billed interest on the amount borrow from the date that transaction posted. This is why you pay your balance in full then redeem any points and deal with the credit balance later.
Deal Fanatic
User avatar
Feb 19, 2010
6237 posts
2971 upvotes
Faulty thread title. They did NOT charge interest on the paid balance. They charged interest per the terms of the credit card which others have already discussed.
Sr. Member
User avatar
Sep 28, 2007
928 posts
54 upvotes
i had no idea about this policy. going to be extra careful to pay correct amount in full every time. i incorrectly paid my statement last month but thankfully it was for a little more than what the credit card statement was.
Deal Addict
Nov 25, 2014
1739 posts
952 upvotes
Newton Brook, ON
Conquistador wrote: Faulty thread title. They did NOT charge interest on the paid balance. They charged interest per the terms of the credit card which others have already discussed.
Interest that had accrued before the payment, on what is now a paid balance, was charged. So the title is an accurate description. The part that is not correct is "TD put a $40 interest charge on the $120 balance."
Deal Addict
Mar 11, 2007
3920 posts
1166 upvotes
QC
Yes thats how it works :(
On a side note, Cap1 doesnt see cashback as payment. I learned that when I got charged for full interest. Luckily, I was able to get the charged reversed.
Banned
Nov 29, 2015
1424 posts
522 upvotes
Brossard, QC
I usually pay back in full amount and just take advantage of the grace period.
Deal Expert
Mar 25, 2005
21907 posts
2720 upvotes
jfmartel wrote: Yes thats how it works :(
On a side note, Cap1 doesnt see cashback as payment. I learned that when I got charged for full interest. Luckily, I was able to get the charged reversed.
They do, just not towards the min payment. As long as you pay the minimum plus the redemption, you are covered.
Deal Expert
Mar 25, 2005
21907 posts
2720 upvotes
CCHunter wrote: I have a TD First Class Infinite credit card, last month I put about $3620 of travel charge on it, and PAID $3500 before the statement due date.

I carry $120 balance forward in order to redeem travel points against it (and expect a small interest charge), then I would cancel the card and close the account, that was the plan.

Yesterday, TD put a $40 interest charge on the $120 balance. I call in and speak with an agent, she said that if the balance is not entirely paid off, then the interest will incur from the day the purchase is made. Mind you it's not a charge card like one of those Amex cards, it's a credit card.

However, at the end, I was able to have it reversed so no interest incurred at all.

We have had a few YMMV Your-mileage-may-vary cases with both TD and MBNA.
This is covered in your disclosure package. Nearly all firms apply the grace period this way.
Deal Addict
User avatar
Apr 10, 2010
1390 posts
194 upvotes
If I don't pay my balance partially but not IN FULL, I will be charged interest from the day of transaction, fine, but ON THE ENTIRE BALANCE (not on the unpaid portion of the balance)? That's surprising to me.
Deal Addict
User avatar
Apr 10, 2010
1390 posts
194 upvotes
nmclean wrote: Interest that had accrued before the payment, on what is now a paid balance, was charged. So the title is an accurate description. The part that is not correct is "TD put a $40 interest charge on the $120 balance."
Got it. Thank you.
Deal Expert
Mar 25, 2005
21907 posts
2720 upvotes
513263337 wrote: If I don't pay my balance partially but not IN FULL, I will be charged interest from the day of transaction, fine, but ON THE ENTIRE BALANCE (not on the unpaid portion of the balance)? That's surprising to me.
If you do not pay in full you loose the total grace period on the balance. Full stop.
Deal Addict
May 10, 2011
1454 posts
505 upvotes
Ottawa
CCHunter wrote: Yesterday, TD put a $40 interest charge on the $120 balance. I call in and speak with an agent, she said that if the balance is not entirely paid off, then the interest will incur from the day the purchase is made. Mind you it's not a charge card like one of those Amex cards, it's a credit card.
That is pretty much how all credit cards work. You are lucky that you got it reversed.

Top