Late Credit Card Problem - HELP

4thHorseman

4thHorseman

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Well, I made a boo boo. For the past two years I have been paying on my Zales card and this month came across my first late payment. They had site problems at the time of trying to pay and it slipped my mind to go back and pay it afterwards. So now I have a late charge, but I also noticed my interest fee has now been added to my total balance. So what was once around $1700 is now $2700.

I have tried to read over all the terms and whatnot and I don't really understand the credit card jargon. So I just have a few questions and I hope the wise people of CAG could help me understand this better.

1. The payments are due on the 9th of every month with the closing date as the 12th. I made last months payment, but the account shows that I am 36 days late. Why would it be counting all of last month as late when the payment has only been a little over a week late?

2. The original purchase was 2 years no interest. That would have ended last month. So would that have been continued until it was paid off or late and if not, why did it show up this month instead of last month?

3. I see something about a grace period of 25 days after the last closing date. I've already set up the next payment to be taken out tomorrow which would fall under that date (unless they are talking about the close date of July...), but the exact wording is:

We will not charge you any interest on purchases if you pay your New Balance by the payment due date each month. This is called a grace period on purchases. if you do not pay the New Balance in full by the payment due date, you will not get a grace period on purchases until you pay the New Balance in full for two billing cycles in a row. We will begin charging interest on cash advances (if available) on the transaction date.
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We will not charge you any interest on purchases if you pay your New Balance by the payment due date each month. This is called a grace period on purchases. if you do not pay the New Balance in full by the payment due date, you will not get a grace period on purchases until you pay the New Balance in full for two billing cycles in a row. We will begin charging interest on cash advances (if available) on the transaction date.
So since I've already set up my next payment to pay this and next month, will my interest be taken off?


I know nobody comes to CAG to help someone with their dumb mistakes, but this is my first and I'm hoping someone can help me understand it better.

Thanks in advance.
 
STANDARD PLAN*
NO INTEREST IF PAID IN FULL WITHIN 6 MONTHS*
on purchases of $300 or more. Interest will be charged to your account from the purchase date if the purchase balance, including premiums for optional credit insurance, is not paid in full within 6 months or if you make a late payment. Minimum payments required.
 
If the original purchase was 2 years no interest you needed to have the balance paid off within 2 years. At the end of that 2 years if the balance is not paid off in full all back interest (The 2 years worth of "no interest" payments) will be added back onto the account. That's how all these 12 month interest free things work. Just like getting a Lowe's card or something. You get a set amount of time to pay the purchase off in full but if even just a penny is still due at the end of the set time, all interest is added to the account, probably at a crazy rate of 20-25% depending on the card and your credit. You probably also got a late penalty of anywhere from $20-$30, maybe more depending on your terms. They may also have a clause that says if you make a payment late all interest can be added as well.
 
What they said. If you didn't pay the full amount off in the promo period or were late a single day you are screwed unfortunately.
 
I don't think it's ALL back interest. I think it's just back interest on the amount you still owe. In this case, 2 years of interest on your $1700 balance.

Edit: If your card is around interest rate is around 23%, then you'd owe an extra $1000 on the $1700.
 
[quote name='elessar123']I don't think it's ALL back interest. I think it's just back interest on the amount you still owe. In this case, 2 years of interest on your $1700 balance.

Edit: If your card is around interest rate is around 23%, then you'd owe an extra $1000 on the $1700.[/QUOTE]

I don't think you're correct. The extra $1K he got added on was for the interest on everything until now. Interest isn't just immediately added based on a certain amount. It's compounded monthly, annually or even daily. So even though he owes $2,700 how he's still going to pay interest on the $1,700 which could add up to another $1,000 unless it pays off the full balance now.
 
[quote name='elessar123']I don't think it's ALL back interest. I think it's just back interest on the amount you still owe. In this case, 2 years of interest on your $1700 balance.

Edit: If your card is around interest rate is around 23%, then you'd owe an extra $1000 on the $1700.[/QUOTE]

99.9% of the time with these "zero interest" deals, it's ALL back interest. That's how they screw you when you do exactly what the OP did.
 
Do the calculations for compounded interest over 24 months for a $1700 loan. It'll come out to $1000 at ~23%.

Edit: Compounded monthly.
 
[quote name='elessar123']Do the calculations for compounded interest over 24 months for a $1700 loan. It'll come out to $1000 at ~23%.

Edit: Compounded monthly.[/QUOTE]

His balance is $1,700 not his payoff amount. Unless you're arguing that his original balance was $3,400 and he paid off $1,700. Then the back interest charges on the interest he paid off would be $1,000.

But there's no way they would say "here's $1,000 interest charge for the remaining balance." That makes no sense. The $1,000 interest was for the balance before today and he's still going to owe interest on the $2,700 he owes right now.
 
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