Are HSBC Pulling a Fast one?

welshlad27

hi all
i wonder if anyone can give me some advice.

i currently have an HSBC credit card with roughly 5K debt on it which i am trying to clear, however over the last couple of months i have taken a pay cut and as such have been paying the minimum repayment via a direct debit. which was suggested i set up after i spoke to the local branch.

anyway i noticed the other day on my statement that even though i have been paying the minimum payments and not spending at all on this card for the last 5 months , my balance has been creeping up.

is the above correct ? i was always under the impression that by making the minimum payment that i would pay at least something off the outstanding balance not have it increase?

any help would be appreciated as im sure you will understand this is all quite a stressful situation in the current climate

on a side note
i canceled my insurance at the third phonecall to them over the phone as they told me i had to apply in writing the first two times yet when i told them that i wsant happy on the third attempt and that i would be making a complaint to the ombudsman they put me through to another dept and done it there and then.

were they just trying to fob me off with the send it in writing line?

sorry if all this sounds is a bit long winded buit im not sure on what i should do next.

thanks for any help

CannyJock

There used to be something about the minimum repayment covering at least the interest on the card under the "responsible lending" rules. You're not still spending on the card are you?

Your other options would be to make additional payments on the card, or maybe look at a 0% balance transfer to move it elsewhere?

The PPI bit is irrelevant, it's cancelled now - but look into whether you can claim any of it back through misselling - it'll cost you a stamp, nothing much to lose imho.

mitrant

It depends on what your interest rate is. It isn't impossible, particularly if you've made large amounts of cash withdrawals, on a high balance for the minimum payment not to cover the interest charges.

YorkshireBoy

If your APR is 35% or more then the 2.5% minimum payments won't cover the interest.

However, how is/was the monthly PPI charged to the account? I suspect it's charged (or at least was charged) after the statement has been produced and the minimum payment calculated.

td_007

It depends on the rate of interest you are paying.

welshlad27

thanks all for your advice and help.

Firstly i havent spent on this card for a good few months.
APR is 22.9%

last months payment was £143.34 (minimum which was paid)
this months payment (prior to the insurance cancelation) = £143.49

the interest itself is calculated to be £104.26

all of this i can understand but i was under the impression that as long as i set a direct debit up that the minimum payment would at least keep the balance level as long as no spending?

also it was only the 10th of june they finally allowed me to cancel the insurance

prior to this it was costing roughly £45 a month so i can see why the balance was increasing but surely the minimum should be enough to cover all ov this if nothing else?

guess i really am being naive.??

welshlad27

YorkshireBoy wrote: »

If your APR is 35% or more then the 2.5% minimum payments won't cover the interest.

However, how is/was the monthly PPI charged to the account? I suspect it's charged (or at least was charged) after the statement has been produced and the minimum payment calculated.

i have just looked at this..

they were taking my payment out on the 1st of the month and then adding the insurance charge on the 4th... i assume this effectively means i am spending on the card? if so is this a fair practice and does it happen often?

CannyJock

welshlad27 wrote: »

guess i really am being naive.??

Nope, not naive - well, I'm not naive and I didn't think on it . It's obscure how they add the cost to your account, effectively counting as extra spending each month that you're not aware of.

Top marks to YB for flagging it.

welshlad27

again big thanks to everyone.

now i just need to know if this is normal practice and classed as fair?