Your Credit Score
Thinking about applying for credit? Check Your Credit Score for free, with no impact on your credit file.
What is residual interest
Residual interest covers any interest calculated on your credit card balance in the days between your statement being issued and you making a full statement balance payment.
Here’s an example of how residual interest works
The figures we’ve used are just for illustration.
1. Statement arrives
You haven’t used your credit card in over a month. When your latest statement arrives, you decide you’ll pay the outstanding balance in full.
2. Statement balance
The amount shown on your statement is £2,198.09. This includes interest chargedIt’s useful to know that interest is calculated daily, then charged on the following statement. up until the date the statement was produced, but not interest that’s accumulated since.
3. Make payment
You make a payment of £2,198.09 using your debit card. This will reach your account by the next working day.
4. Next statement
By now, you haven’t used your credit card in over two months. The statement balance is £18.02, which accounts for ‘residual interest’ charged between your previous statement being produced and the date your last payment reached your account.
5. Make payment
You make a payment of £18.02 which clears your balance.
As the £18.02 is purely interest, we won’t charge further interest. Some lenders might call this a ‘final interest charge’.
6. All done
You’ll receive a final statement, but this time it’ll show your balance as paid in full.
Statements won’t be issued while there's no balance to pay, or recent account activity.
A summary on residual interest
If you’re paying off your credit card balance in full, you need to know about residual interest.
- It covers any interest calculated on your balance in the days between your statement being issued and you making a full statement balance payment.
- Even if you don’t use your card again, you might need to make a payment the following month to cover any residual interest.
- If you don’t keep up with payments, fees and charges could apply and your credit score could be negatively affected.
- We don’t charge further interest when there’s only interest left to pay.
Want to read more?
Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.