Consumer complaint received 2023-05-18
Company: BARCLAYS BANK DELAWARE
State: TX
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
I pay by statement balances in full every month. In XXXX / XX/XX/2023, GAP changed their credit card service provider from XXXX XXXX to Barclays. Subsequently, I was asked to create a new account and link my bank account, setup auto-pay, etc. Even though I added my bank details, etc., due to unclear user interface, I was told that I was not enrolled in auto-pay, resulting in my payment for the XXXX statement being delayed by 1 day. I explained this to the Barclays bank and they credited the late fee back to my account. Since then, i have had auto-pay setup to pay my entire statement balance in full each month. 

Even though I am enrolled in auto-pay to pay my balance in full, I am still seeing interest charge for purchases on my statement. When I contacted the credit card company, I was provided the below explanation : "... Upon review of your account, we see that your XX/XX/ statement balance was not paid in full. 

When your statement balance is not paid in full by the XXXX XXXX XXXX cut off time on your payment due date shown on your statements, you're assessed interest, which accrues based on the average daily balance. We currently use a method called 'daily balance ( including new purchases ) to calculate interest. Please keep in mind that we calculate interest separately for each Balance Subject to Interest Rate. Examples include purchases at your current annual percentage rate ( APR ), balance transfers, cash advances, and different promotional balances. Your monthly billing statements show each Balance Subject to Interest Rate within the Interest Charge Calculation section. To calculate interest, we first calculate the average daily balance for each Balance Subject to Interest Rate. This is done by taking the balance on the previous day, subtracting any payments or credits, and adding any purchases posted that day. The result is the total balance for the day. This process is repeated for each day in your statement cycle. At the end of the month, all of the daily balances are added together and divided by the number of days in the statement cycle, which equals your average daily balance. 

As a reminder, the amount of interest assessed when your billing cycle closes each month will depend on the average daily balance and number of days per billing cycle. The higher the average daily balance and the more days there are in the billing cycle, the higher the interest charge. 
... .. " Based on the above method of calculating interest, consumers will be paying interest in perpetuity as long as they keep using their card on a monthly basis. When I enrolled in auto-pay, there is no option available to clear or pay the entire amount. The only options available are to pay " statement balance '', " minimum due '' and " other amount ''. Considering that this is auto-pay, " other amount '' is not practical. I have it set to pay the " statement balance ''. If this bank is going to charge interest based on daily balance, they should have an option to pay whatever is necessary for users to be free of monthly interest charges. Both online and in their monthly statements in mail. The only way to get rid of this interest charge is to not use their card for a month or pay more than the statement balance to bring down the daily balance to XXXX. 

I find this unethical and unfair for consumers and so bringing this to your attention.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with monetary relief