Paying off credit cards. A catch?

MaximumFish

Hi all,

Me and my partner have rather large credit card debts between us (30K, most of which are thankfully on cheap promotional rates) and earlier this month we started along the road to clearing them off. Currently we're paying around £670 a month in minumum payments. We decided the best way to do this was:

1) Set up a joint account that we pay a monthly fixed sum (£700) into from our own personal accounts. (done)

2) Set up direct debits for each card we have, paying the minimum amount each month from the joint account. (done)

3) At the end of each month, we'll have a chunk, £30 to start with, getting larger each time, to pay manually towards the highest interest card.

4) As well as the above, we've also done a budget and will pay any money we have left over each month from our personal accounts to the same card.

This all seemed like a great idea until I was on the phone to Barclaycard setting up the direct debit, and this is where the catch comes in.

Usually I skip over the terms and conditions as they're all a muchness, but this time I could've been sure that I heard them say, if a manual payment is made for any particular month then the direct debit for that month will not be taken. Obviously that would screw up our plan, so it got me to wondering if (a) I heard right, and (b) how many other companies do the same thing? Hence I come to you knowledgable lot for advice!

Is our plan sound? Do companies really do that and who? And would we be better off setting up fixed standing orders or fixed amount direct debits rather than how we planned?

We have the following cards:

Barclaycard (x2)
Virgin
Capital One
M&S (x2)
MBNA

Any help is very much appreciated. We can't wait to be free of the bonds of these damned things!

Max

MrsBartolozzi

Hi there Max,
On the back of my Barclaycard statement it doesn't mention this at all. But it does say that you can choose for your Direct Debit to pay off the entire balance, the minimum payment or any £ amount you choose. Maybe when you go to pay the extra to barclays you could just up your direct debit to include the extra?
It does seem a bit strange though, so I would give them a ring to make it clear before you decide what to do. 08009177277 (and its free!)

Hth, MrsB.

Lemon_Tree

i've had this before, what i did was pay the extra after the DD was paid, it wasn't with Barclaycard but maybe it will be the same.