Credit Card Min Payment

MarsdenCuckoo

never-in-doubt wrote: »

What does the concern of others have to do with stupidity exactly? Patronised, who? Me to the OP? Hardly..... I was speaking to him with the same level I would with any child! I say child as a grown up would know the lender wouldn't pre-advise of overlimit on interest!

:idea: For the avoidance of doubt I was referring to your comments to me; not the OP.

adrianelliott

I've never had this sort of problem before - my minimum payment is always greater than the total amount of interest compounded each month.

Does the OPs scenario occur when interest hits the balance before the minimum payment is applied, or is it because the APR is so high that it outstrips the minimum payment?

I've got to admit, I've used credit cards for a while and was never aware that making minimum payments each month could allow you to go over a credit limit if you didn't spend on the card that month.

never-in-doubt

adrianelliott wrote: »

I've never had this sort of problem before - my minimum payment is always greater than the total amount of interest compounded each month.

Does the OPs scenario occur when interest hits the balance before the minimum payment is applied, or is it because the APR is so high that it outstrips the minimum payment?

I've got to admit, I've used credit cards for a while and was never aware that making minimum payments each month could allow you to go over a credit limit if you didn't spend on the card that month.

This explains it better:

never-in-doubt wrote: »

Do you mean like you have a limit of £1000, your balance is £970 and they take the £25 min payment but on the new statement date add £65 interest meaning you're actually £10 overlimit?

Hypothetically of course?

alfred64

The situation described by OP does happen.

Typically it will hapen on a high interest card such as vanquis which is running near its credit limit and where the minimum payment barely covers the interest charged.
Then, if there is a fee due, for example, and some vanquis cards have a £25 annual charge, this will take the balance over the limit.
An overlimit fee will automatically will be applied, but if you have not used the card since the previous statement you can often get this refunded if you contact cs and have otherwise used the account in a satisfactory manner - e.g no late payments.

speedbird1973

cifpower wrote: »

A payment cannot increase your balance though which is why I am a little confused. If there has been interest applied that has taken you over your limit you will be hit with an overlimit fee and any promotional offers will be withdrawn.

Actually it can, but over a 12 month period it can't.