Unfair charge on late payment of 65p on credit card bill!

TVM01

Hi - wanted to know if i could reclaim the late payment charges on my credit card bill - i had underpaid my card by 65p (total bill of £1615.81) and i am being charged £93.56 as interest! Been with the company for past 6 years without defaulting on any payments. Company unwilling to waive it due to policy. all the forum discussions seem to be about going over the credit limit - i wanted to know whether i could reclaim late payment charges as well.

normanmark

Well you did under pay the card. As for the small amount i can definitely see the frustration, but that's no fault of the credit card company?

KiKi

Hi TVM01

Unfortunately as you underpaid the card, you will pay interest on the lot. You haven't incurred a late payment charge (from what you say) - you've just incurred interest which isn't the same thing, and you can't claim that back.

The only thing you can try is calling the company, being REALLY, polite and lovely and claiming stupidity and innocence, point out your excellent record, and ask if they could possibly waive the interest as a favour because you're an excellent customer and want to stay with them etc etc.

Getting cross or annoyed will definitely not help anything!

Sorry I can't bring more good news!

Which credit card company is it?

KiKi

TVM01

Thank you for your reply - i accept that i have underpaid although it was not intentional. But charging £93 for a 65p default - is that fair? I have seen threads saying that if you exceed your credit limit you will be charged a penalty - and that is deemed unfair. In the same vein is this not unfair as well?

jamalfatty

TVM01 wrote: »

Thank you for your reply - i accept that i have underpaid although it was not intentional. But charging £93 for a 65p default - is that fair? I have seen threads saying that if you exceed your credit limit you will be charged a penalty - and that is deemed unfair. In the same vein is this not unfair as well?

They havent charged you £93 for being 65pence short though, they've charged you this for borrowing £000's and then not paying the full balance back, maybe it is unfair, but its the way cards work.

If you phone them and explain situation calmly they may waive some/all of it, but dont have any obligation to

TVM01

company in question is marks & spencers

ShelfStacker_3

TVM01 wrote: »

Thank you for your reply - i accept that i have underpaid although it was not intentional. But charging £93 for a 65p default - is that fair?

I can assure you this is not a default; a default is where you become extremely delinquent with your payments (i.e. missing lots of them.) If this were a default, £93 would be the least of your worries.

Cards basically give you a grace period of about 50 days interest free, and then if you don't pay the balance back in full charge you interest on the entire amount back to the date of the transaction. So, as an example, pretend you borrowed £1000 on a credit card that's on a 0% deal for a year, but whose standard rate is 20% APR. If you, at the end of the year, paid back the entire amount less one penny, they would charge you £200 interest. Even though you paid back 99.9% of the debt, they've charged you interest on 100% of it.

This is what happened here. They've charged interest on the entire balance because you've not paid all of it - it's unfair, yes, but most cards work that way, and it's why 0% deals are obscenely profitable when people don't pay them off in time.

The best course of action is to ring them up and ask nicely for the interest to be waived. You may not succeed, but you don't get anywhere without asking...

King_Of_Fools

Feel happy that you will only pay interest on 65p in the next bill.

KiKi

TVM01 wrote: »

Thank you for your reply - i accept that i have underpaid although it was not intentional. But charging £93 for a 65p default - is that fair? I have seen threads saying that if you exceed your credit limit you will be charged a penalty - and that is deemed unfair. In the same vein is this not unfair as well?

Firstly, as others have said, it's not a default - you just didn't pay the whole balance off. A mistake, certainly, but still your accountability.

Fairness is subjective, I suppose. But it's in the T&Cs you signed up to. If you do not pay the balance off in full, at the end of the month, you will be charged interest on the WHOLE amount, even if you were only 1p short.

This is not a penalty or a late payment that is potentially unfair - it's just interest that you owe for borrowing on a credit card.

I can completely understand that you're frustrated because it's all for 65p, but at the end of the day, it's the T&Cs you signed up to, and very standard practice. As I suggested in my previous post, the only thing you can do is play innocent and naive and beg them to forgive this one error and very kindly ask them to refund the interest they've charge - however, I don't rate your chances.

Sorry. It's an expensive lesson to learn, but at least it was only £93 and not £930.

KiKi

TVM01

thank you all for your replies. I guess i have learnt my lesson the hard way and will have to rely on their goodwill to get a reduction.

KiKi

No worries, mate.

I hope you manage to get something sorted - let us know how you get on.

KiKi