SBI Credit card shocking Financial charges

Cody wrote:

u need to pay whatever due appears in the statement, you should not do your calculations here.

And the refund balance would be adjusted in the next cycle.

Nothing wrong with SBI, it’s a regular thing. And suppose if your due is 44082 and you pay only 42311 then interest would be charged on the whole amount which is 44082.

Better change the title, it’s misleading.

I have been following the process of adjusting the refund for other cards and never faced any issue. This is the first kind of issue I have faced in last 12 years.

Same did happen with me. SBI doesn’t consider refund as Payment. Can’t do much about tha.

ankurmahajan wrote:

Same did happen with me. SBI doesn’t consider refund as Payment. Can’t do much about tha.

Did they reverse your charges??

Rockstar008 wrote:

Did they reverse your charges??

Nope.

ankurmahajan wrote:

Nope.

How old is your card?

OP take it as a lesson learnt and make sure you always pay full.

Rockstar008 wrote:

How old is your card?

At that time, around a year. But, you can try.

ankurmahajan wrote:

At that time, around a year. But, you can try.

They are saying after 6 months they can try for reversal subject to approval

Rockstar008 wrote:

I have been following the process of adjusting the refund for other cards and never faced any issue. This is the first kind of issue I have faced in last 12 years.

bcoz earlier the refund was credited before the statement was generated.

Rockstar008 wrote:

But in icici, HDFC, Axis refunds are considered as payments. Whats wrongs with SBI??

None of the banks considered refunds as payments post bill generation.
If any of them are considering then you are lucky enough.

atx88 wrote:

It is surprising so many dimers here do not know how interest is charged on credit cards! Come on guys…

If bill was 44k and you paid 42k, then interest is charged ONLY on the balance amount of 2k and NOT on full 44k of that bill.
(but this is part 1 of charges)

Part 2 of charges are on the txns done after that statement date. Since full amount is not paid, every transaction done after statement generated is charged interest on. So basically that means since u did not pay full amount for Nov bill, all txns of Dec bill got charged with interest.

So the total interest/financial charges you got charged are actually based on your Dec bill txns mostly. (And this is where the trick of looting by credit card companies lie.)

Here is an example of how it works:
txn #1: 15 oct: ₹10,000
txn #2: 20 Oct: ₹22,000
txn #3: 28 Oct: ₹8,000
txn #4: 11 Nov: ₹4,000
13 Nov statement generated with ₹44,000 bill, due date 3 Dec
txn #5: 15 Nov: ₹16,000
txn #6: 18 Nov: ₹20,000
txn #7: 20 Nov: -₹2,000 (refund)
27 Nov: ₹42,000 paid out of ₹44,000
txn #8: 5 Dec: ₹16,200
txn #9: 11 Dec: ₹2,200
13 Dec statement generated with XYZ bill, due date 3 Jan

XYZ bill = txn4 (₹2,000 balance) + txn5 + txn6 – txn7 + txn8 + txn9 + interest @ 3.5% per month on all these txns.
(txn 7 is subtracted because its a credit txn)

This example matches somewhat to OP’s bills and dates. Here, since full amount was not paid on 3 Dec and refund is not considered as payment, txn4 is considered as incomplete payment and interest will be charged on it for ₹2000 amount, not full ₹4000 as only ₹2000 was paid less. But additionally, as per rules, txn 5, 6, 8 and 9 are also charged interest on because all of them were done after Nov statement generation which wasn’t fully paid till next statement generation.

Since ₹2000 was paid on 20 Nov, it will be counted as a payment in Dec statement and settled against the first unpaid txn in datewise order. Now datewise, first unpaid txn is txn4, so this ₹2000 will be settled against txn4 and interest on txn4 will be counted from 11 Nov to 20 Nov, ie, 9 days. = ~ ₹21
Interest on txn #5 = 15 Nov to 13 Dec = 29 days = ~ ₹541.33
Interest on txn #6 = 18 Nov to 13 Dec = 26 days = ~ ₹606.7
Interest on txn #8 = 5 Dec to 13 Dec = 9 days = ~ ₹170.1
Interest on txn #9 = 11 Dec to 13 Dec = 3 days = ~ ₹7.7

This totals the finance charge = ~ ₹1347 and total Dec bill would be around ₹54,400 + ₹1347 = ₹55,747 as per this example.

So you see one thing here: Actual interest for ₹2000 less payment was ₹21 only… Remaining ₹1325 was bank magic

Now, you may think ₹2000 was refunded on 20th and counted in the Dec bill, then why interest charged on txn after 20th Nov. So here is the thing, if u do not pay full bill of any month, all txns after it will be charged interest until any of two conditions are met (whichever happens earlier):
1 → either next bill generates, or
2 → full due amount is paid (including unbilled) on any date before statement generates

So lets take any date, say 25th Nov, total balance pending till then was txn4 (₹2000 balance) + txn 5 + txn 6 = ₹38,000. So if u had paid this full balance of ₹38,000 on 25th Nov, interest addition would have stopped on 25th Nov itself. But since it was not paid, it got dragged till the next statement generation date of 13 Dec.

I know this is huge and complex, but this is how the calculation is done.

Its very complex to understand man.. anyways now I got a bill of 1600 to pay.. should I clear it at the earliest as they might be incurring interest on this too or I can wait till 2nd Jan 2022 which is my deadline to pay as I am still fighting with them. Please suggest

atx88 wrote:

It is surprising so many dimers here do not know how interest is charged on credit cards! Come on guys…

If bill was 44k and you paid 42k, then interest is charged ONLY on the balance amount of 2k and NOT on full 44k of that bill.
(but this is part 1 of charges)

Part 2 of charges are on the txns done after that statement date. Since full amount is not paid, every transaction done after statement generated is charged interest on. So basically that means since u did not pay full amount for Nov bill, all txns of Dec bill got charged with interest.

So the total interest/financial charges you got charged are actually based on your Dec bill txns mostly. (And this is where the trick of looting by credit card companies lie.)

Here is an example of how it works:
txn #1: 15 oct: ₹10,000
txn #2: 20 Oct: ₹22,000
txn #3: 28 Oct: ₹8,000
txn #4: 11 Nov: ₹4,000
13 Nov statement generated with ₹44,000 bill, due date 3 Dec
txn #5: 15 Nov: ₹16,000
txn #6: 18 Nov: ₹20,000
txn #7: 20 Nov: -₹2,000 (refund)
27 Nov: ₹42,000 paid out of ₹44,000
txn #8: 5 Dec: ₹16,200
txn #9: 11 Dec: ₹2,200
13 Dec statement generated with XYZ bill, due date 3 Jan

XYZ bill = txn4 (₹2,000 balance) + txn5 + txn6 – txn7 + txn8 + txn9 + interest @ 3.5% per month on all these txns.
(txn 7 is subtracted because its a credit txn)

This example matches somewhat to OP’s bills and dates. Here, since full amount was not paid on 3 Dec and refund is not considered as payment, txn4 is considered as incomplete payment and interest will be charged on it for ₹2000 amount, not full ₹4000 as only ₹2000 was paid less. But additionally, as per rules, txn 5, 6, 8 and 9 are also charged interest on because all of them were done after Nov statement generation which wasn’t fully paid till next statement generation.

Since ₹2000 was paid on 20 Nov, it will be counted as a payment in Dec statement and settled against the first unpaid txn in datewise order. Now datewise, first unpaid txn is txn4, so this ₹2000 will be settled against txn4 and interest on txn4 will be counted from 11 Nov to 20 Nov, ie, 9 days. = ~ ₹21
Interest on txn #5 = 15 Nov to 13 Dec = 29 days = ~ ₹541.33
Interest on txn #6 = 18 Nov to 13 Dec = 26 days = ~ ₹606.7
Interest on txn #8 = 5 Dec to 13 Dec = 9 days = ~ ₹170.1
Interest on txn #9 = 11 Dec to 13 Dec = 3 days = ~ ₹7.7

This totals the finance charge = ~ ₹1347 and total Dec bill would be around ₹54,400 + ₹1347 = ₹55,747 as per this example.

So you see one thing here: Actual interest for ₹2000 less payment was ₹21 only… Remaining ₹1325 was bank magic

Now, you may think ₹2000 was refunded on 20th and counted in the Dec bill, then why interest charged on txn after 20th Nov. So here is the thing, if u do not pay full bill of any month, all txns after it will be charged interest until any of two conditions are met (whichever happens earlier):
1 → either next bill generates, or
2 → full due amount is paid (including unbilled) on any date before statement generates

So lets take any date, say 25th Nov, total balance pending till then was txn4 (₹2000 balance) + txn 5 + txn 6 = ₹38,000. So if u had paid this full balance of ₹38,000 on 25th Nov, interest addition would have stopped on 25th Nov itself. But since it was not paid, it got dragged till the next statement generation date of 13 Dec.

I know this is huge and complex, but this is how the calculation is done.

Actually I did not do any debit transaction on my credit card after 13th Nov.. only recieved 1771 refunds recieved on 20th and bill payed of 42300 thats all no other transaction on this credit card..

Rockstar008 wrote:

Actually I did not do any debit transaction on my credit card after 13th Nov.. only recieved 1771 refunds recieved on 20th and bill payed of 42300 thats all no other transaction on this credit card..

If we go by your calculation then charges levied on my card are wrong 😳

Rockstar008 wrote:

Its very complex to understand man.. anyways now I got a bill of 1600 to pay.. should I clear it at the earliest as they might be incurring interest on this too or I can wait till 2nd Jan 2022 which is my deadline to pay as I am still fighting with them. Please suggest

Oh my bad, maybe could have explained better.

Well all you need to remember is in case a bill is not paid on time, ALL txns done after that late bill’s bill generation date will also be charged interest.

For example, if Nov bill was paid late, then all txns you see in Dec statement will be additionally be charged interest on from the date of individual txn.

About your question, no need to worry for now. Whatever interest has been charged, its locked till statement generation date (13 Dec). Now it doesn’t matter whether u pay today or 31 Dec or 2nd Jan. But in case u miss 3rd Jan, this whole month will be counted for Nov txns interest.

But, as best practice, if the amount is not very high and if u can pay today, its best to pay today for own peace of mind and get out of this bubble.

And from next time onwards, please ensure you pay full due amount (not refund adjusted amount) 3 days before bill due date. You can adjust other credits like those 15-20rs from Cred. You can also pay in parts. But never adjust refund.

Many times, the customer care person also has no idea how interest has been charged, all they see is an interest calculation chart/table on their software, so even if you challenge some calculation, they can’t do much because they also have no idea. Hence it is best never to even have this situation again. This problem is not there with some banks like Citi etc, but day by day most banks are going with this approach only of not considering refunds as payments for the same reason of debt rotation as someone already mentioned in this thread.

btw, what did you mean by a bill of 1600? 1600 seems like your interest + gst only… Did you do no txn in Dec statement (13 Nov to 12 Dec)?

atx88 wrote:

Oh my bad, maybe could have explained better.

Well all you need to remember is in case a bill is not paid on time, ALL txns done after that late bill’s bill generation date will also be charged interest.

For example, if Nov bill was paid late, then all txns you see in Dec statement will be additionally be charged interest on from the date of individual txn.

---

About your question, no need to worry for now. Whatever interest has been charged, its locked till statement generation date (13 Dec). Now it doesn’t matter whether u pay today or 31 Dec or 2nd Jan. But in case u miss 3rd Jan, this whole month will be counted for Nov txns interest.

But, as best practice, if the amount is not very high and if u can pay today, its best to pay today for own peace of mind and get out of this bubble.

---

And from next time onwards, please ensure you pay full due amount (not refund adjusted amount) 3 days before bill due date. You can adjust other credits like those 15-20rs from Cred. You can also pay in parts. But never adjust refund.

Many times, the customer care person also has no idea how interest has been charged, all they see is an interest calculation chart/table on their software, so even if you challenge some calculation, they can’t do much because they also have no idea. Hence it is best never to even have this situation again. This problem is not there with some banks like Citi etc, but day by day most banks are going with this approach only of not considering refunds as payments for the same reason of debt rotation as someone already mentioned in this thread.

---

btw, what did you mean by a bill of 1600? 1600 seems like your interest + gst only… Did you do no txn in Dec statement (13 Nov to 12 Dec)?

Yes 1600 is finance charges + gst which is my 13 December bill.. Yes no txns done between 13 Nov to 12 Dec.. only they levied these finance charges to me which is part of 13 December statement bill.

Rockstar008 wrote:

If we go by your calculation then charges levied on my card are wrong 😳

Maybe, may not be. In that example, txn4 was done only 1 day before statement generation date.

However, if that txn was done many days earlier in this statement, lets say 15 Oct, then interest would be much more.

Can you please share screenshot of Nov statement & Dec statement so I can get exact dates and amount of txn. Please do not include any other details, just the txns please.

atx88 wrote:

Maybe, may not be. In that example, txn4 was done only 1 day before statement generation date.

However, if that txn was done many days earlier in this statement, lets say 15 Oct, then interest would be much more.

Can you please share screenshot of Nov statement & Dec statement so I can get exact dates and amount of txn. Please do not include any other details, just the txns please.

Where can I upload the images?

Rockstar008 wrote:

Where can I upload the images?

Anywhere u like.. either imgbb.com or your Google drive and share link

atx88 wrote:

Anywhere u like.. either imgbb.com or your Google drive and share link

Nov 13 Statement – https://ibb.co/x...Z9
Dec 13 Statement – https://ibb.co/f...Qx

Please check and let me know.

Rockstar008 wrote:

Nov 13 Statement – https://ibb.co/x...Z9
Dec 13 Statement – https://ibb.co/f...Qx

Please check and let me know.

sent u a dm, pls check

atx88 wrote:

sent u a dm, pls check

Yup replied

What if a high value purchase, say 1L, is cancelled & refunded after the statement generation date? Paying the statement amount will result in a credit of 1L. How to transfer it back to the bank a/c? And how to claim interest on it?

Rockstar008 wrote:

Yup replied

Was he able to give you the exact calculations in the dm?

UniqueDimer wrote:

Was he able to give you the exact calculations in the dm?

Yes he seems to be a champ 😀

Rockstar008 wrote:

Yes he seems to be a champ 😀

Then, please share that championed calculation here for us to see, so that others can understand too.

UniqueDimer wrote:

Then, please share that championed calculation here for us to see, so that others can understand too.

For you ref – https://ibb.co/Z...jz