"Up to 62 days interest free on purchases when you pay your full balance off each month", Contradictory?

[Deactivated] on 20/12/2016 - 19:12

One of the terms of a credit card I just got is:

"Up to 62 days interest free on purchases when you pay your full balance off each month".

Question is if I have to pay the full balance each month, then how can I benefit from 62-day-interest-free promotion? This condition seems contradictory or otherwise I don't understand what is going on…

Example: I purchase something for $500 at day 1 and don't buy anything else on the card. I expect to pay no interest up to day 62. But at day 30, I'll be given statement of $500, which have to pay. Or is the first statements coming after 62 days?

Financial

Comments

  • loulou1 on 20/12/2016 - 19:15
    +12

    If statement came on day 30, it would be due for payment on day 62. Anything bought on day one therefore has 62 days interest free.

  • Xyzzy on 20/12/2016 - 19:16
    +2

    At day 30 (in your scenario) you get a statement with a balance of $500. You then have 1 month (31 days) to pay, after that you are charged interest. So 30 + 31 = 61 days interest free.

  • [Deactivated] on 20/12/2016 - 19:20

    Thanks… that answers my question, Champ!

    and they say "up to" to accommodate all the consecutive months.

  • Geewhizz on 21/12/2016 - 06:28
    +1

    and they say "up to" to accommodate all the consecutive months.

    No, they say 'up to' because if you bought it on day 28 of your month, ie 2 days before the statement was generated, you would only have something like 32 days total interest free. Also be aware that if you don't pay in total by the due date, then interest could be charged in full on any purchases since the last time you did pay in full.

    In explanation, say you pay January's balance in full, then during February you make purchases totalling $6000 and pay all but $20 off that month's statement - you may be charged interest FROM THE DATE OF PURCHASE on that full $6000, not just interest on the remaining $20. They may also subsequently charge you interest on your balance the following month, regardless of whether or not it was paid in full.

  • [Deactivated] on 21/12/2016 - 08:48

    Thanks geewhizz for pointing this out…I didn't know how this system works.

    I was actually contemplating on whether I should pay my full balance on another card next month because it's quite a large balance (~$1500) and I did all the shopping just this weekend.

    Better to pay full balance every month then!

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