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Initial purchase not paid on CC
what happens now??


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#1 yummymummycakes

Posted 13 January 2013 - 09:47 PM

My DD took out a cc with an interest free period of 12 or 18 months (she cant remember) for a purchase amount of $663. However rather than paying that off she has made more purchases and now owes $5k on the card.

Can someone tell me what happens with the unpaid interest free purchase and roughly how much the interest would be when it it hits the card?

How does the card company recognise that amount being paid? For example if I paid the $663 then would the interest be avoided or does the entire amount need to be paid?

Please help, I am totally lost as I have never had a cc and she has a mental health condition and is just sticking her head in the sand.

#2 SeaPrincess

Posted 13 January 2013 - 10:06 PM

Generally, payments are applied to the most recent purchases first, so you'd need to pay off the whole amount to cover the original purchase.  The interest rate could be over 20% - your best bet is to have a look if the interest rate is showing on a statement, or call the CC company.  Is she being charged interest on the new purchases?  How long has she had the card?

#3 yummymummycakes

Posted 13 January 2013 - 10:12 PM

this is what is saying on the home screen message

"Just a reminder that your interest free period is due to expire soon on one of your purchases.

To avoid paying unnecessary interest, make sure you pay the outstanding amount by your due date. To view the full details of your promotion go to Transactions, located under My Account.


OR



If you plan to pay your purchase off over time, check your statement for the minimum monthly payments due.

#4 BenevolentDictator

Posted 13 January 2013 - 10:14 PM

have pm'ed you YMC

#5 yummymummycakes

Posted 13 January 2013 - 10:15 PM

in the statement it does mention 'billed finance changes' what does that mean?

#6 Tobias'smum

Posted 13 January 2013 - 10:15 PM

generally its last purchase first however some you can call to make a payment to a particular interest free purchase so it pay to call to see if this can be done

all the best

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#7 yummymummycakes

Posted 13 January 2013 - 10:18 PM

dogged - got your pm but am panicking for her!


#8 *-*

Posted 13 January 2013 - 10:20 PM

May I ask which company?

I can help with one, but not others.  Some other people my well be the same.

#9 blackbird

Posted 13 January 2013 - 10:22 PM

When the interest free period is over, if the entire amount owning on the card is not paid then your DD will pay the same interest rate on the initial purchase that the rest of the purchases are subject to,

interest free terms are designed to suck you in to doing just what your DD has done she could now be paying as high as 25% interest on that 5k, which compounds each month and sometimes they have daily calculations

#10 yummymummycakes

Posted 13 January 2013 - 10:43 PM

it is through Gomastercard

#11 blackbird

Posted 13 January 2013 - 11:26 PM

oh no!

well I got this from the site, see below. that card is through gemoney, they have really been bad for many people I know, might be better off trying for a balance transfer to another card company on a low interest rate, some even do interest free on balance transfers and then you go on the a low interest rate, always check what the rates will be.

Payments after the Interest Free period
If you haven't paid off your purchases within the Interest Free period, you will be charged interest on the outstanding amount from the date your Interest Free period expired. This interest will not be backdated.

Credit Card Up to 21.74% Interest rate applicable to outstanding credit card purchases.
Cash rate Up to 29.49% Interest rate applicable on cash advances, purchases & BPAY where biller doesn't accept credit or we have otherwise told you that will be treated as a cash advance.
Expired Promotional Purchases 29.49% Interest rate applicable on outstanding balances that aren't subject to a promotional period.

your DD will pay nearly 30% interest on the initial purchase :s

the interest rates were hard to find, took a bit of digging but its here- http://www.gomastercard.com.au/features/rates-and-fees.html

she needs to do a balance transfer with another bank asap. Well thats what I would do.


Edited by blackbird, 13 January 2013 - 11:28 PM.


#12 yummymummycakes

Posted 14 January 2013 - 12:26 AM

it appears that the interest free period ends on the 18th of this month.....Urgh what a mess!!!

#13 IShallWearMidnight

Posted 14 January 2013 - 12:48 AM

how frustrating! Hope shes learnt her lesson, albeit the hard way!




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