Interest Charges on Cash Advance

Lfolken on 18/11/2016 - 14:13

Just reviewed my latest credit card statement and found the deposit I made on one of the local betting sites got flagged as a cash advance (it used to be just a regular transaction earlier this year). Anyway, so I got charged a cash advance and some interest which is fair but my questions are -

  1. Does the bank stop charging me interest once I've made full payment of the balance?
  2. Am I still being charged interest in the current period since the balance is outstanding (But not due yet)? Does that mean there'll be more interest I have to pay?

Thanks

Financial

Comments

  • Marcsie on 18/11/2016 - 14:34

    Why don't you just ring up the bank and find out ?

    • folken on 18/11/2016 - 14:37

      That's my next step. Thought I'd ask here first to see.

      • Pharos5 on 18/11/2016 - 18:41
        +1

        If we give incorrect advice or your bank has a different policy to others, we aren't the ones paying the interest ans fees.

        • Marcsie on 18/11/2016 - 19:07

          Good point, that's exactly what I mean :)

        • folken on 19/11/2016 - 12:50

          Wasn't my plan to charge anyone here :)

  • LaScrooge on 18/11/2016 - 14:37
    +1

    Hi,

    From my experience having worked in credit cards for one of the big four (which I will not disclose), all gambling which can be identified by the vendor details are flagged as a cash advance.

    These usually accrue interest immediately, and will continue to accrue until fully paid off as the interest accumulates separately to your 55/45 day interest free period etc.

    Yes the bank will stop charging you interest when the charge is paid, however it may be paid off first (say if it was $5, the first $5 goes to it from e.g. a $1000 payment) or last on the statement (first $1000 goes to normal credit card statement, with charge being paid off only after) depending on how the bank deals with them.

    Best thing to do is call up and discuss how to pay it off, and remember you will have residual interest on your next statement (interest that fell in to the following statement cycle).

    • folken on 18/11/2016 - 14:42

      I made an extra payment during that period thinking it would cancel out any interest but looks like it went to purchases made before the gambling "deposit".

      • LaScrooge on 18/11/2016 - 14:47

        Yeah, I imagine that would have happened as what it would do is go to the previous statement etc. Usually you have to pay the full statement that the charge is on to get rid of it completely. They're an absolute pain in some ways, so best to avoid them.

        • folken on 18/11/2016 - 15:02
          +1

          Yeah I'm learning the hard way. Was too lazy to make a Bpay payment. I'm on the phone with the bank to try to sort it out.

          EDIT: the bank has reversed the interest since I made the payment within the period the cash advance took place. pheww :)

        • LaScrooge on 18/11/2016 - 17:32

          @folken2k: That was nice of them, however, I would check your next statement for any residual interest. It is very easy to make the mistake of cancelling that months interest, but not the interest that follows. Its an unfortunate quirk of the system, but should it happen, I imagine they'll be awfully apologetic and fix it!

        • folken on 19/11/2016 - 12:50

          @chino101: Yeah I'll make sure to check the current period statement.

  • racerm911 on 18/11/2016 - 15:14

    Check your Terms and Conditions, but from my understanding - this has been the case for some time, however it's only up until recently that some banks are starting to enforce this - which is why it's only been showing up now.

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