help me understand Virgin please?

Shelldean

OH has a Virgin card which he's run up quite a large balance on.

I finally lost my temper:mad::mad: early November and he's not used the card since. and we agreed we'd meet the mimimum payments and slowly bring the balance down paying extra when we could.
He did call Virgin early December asking if they could offer a better rate of interest or even let him have 0% for 6 mths as HSBC has done. Nothing wouldn't play ball. Then today his Jan statment arrived and TBH has confused me totally, even by making the min payment his balance has gone UP!!!!! Also realsied his credit limit had been reduced between Oct statement and Nov Statment. From £5700 down to £5300, so not a huge drop and tbh it doesn't really matter as we just want to clear the card and get rid of it. But he received NO letter informing him of this change.

So got him to call Virgin and ask how come they'd reduced his limit without informing him? her reply was it was because he called on 2 Dec and said we was having troubles. Uuummm don;t think so as the reduction happened between Oct and Nov statements. This stumped her, and she admitted there was no notifcation on his account detailing the reduction.
he then queried the fact that even by paying the mimimum payment his balance had increased. She waffled on about they ask for the interest plus £5, but they haven't and no amount of talking could get her to see this. She did offer to put him thru to another dept, but they'd gone home early due the weather, she did give him a number to call when they are open.

Below is a list of his recent statments NO purchases since 26 Oct which were included in teh 2 Nov statement.

Statement date Balance Min payment
2 November £5228.59 £123.00 Paid 25 Nov
1 december £5214.91 £114.32 Paid 26 Dec
2 january £5220.93 £125.34 not paid yet


I put the details of the card inot the snowball calculator and it stated the " the bottom line is you wil never clear this card it will always increase"

Can some one please explain what exactly is happening here???

nemeth782

Maybe the APR changed, and now the minimum payment is less than the monthly interest charge?

What is the APR on those three statements? Are there any charges (late payment or overlimit etc..) on those statements?

How much is the interest charge on each statement?

Shelldean

the interest hasn;t changed as that was the first thign OH said "those *^*^^£" at virgin have increased my interest rate. And I was just about to tell him to call them and get it frozen and we'll pay till it closed etc.
But then I looked at his statements and the interest is all the same.

On Nov, Dec and Jan all state 2.2071% per month. Infact even the earlier statements ahve the same rate on them

Interest charged is as follows....

Nov statement £118.00
Dec statement £109.32
jan Statement £120.34


we can't work out why more interest has been charged in Jan when nothing has been spent on the card??? we thought the pattern set in Nov and dec - Balance and interest reducing slowly but surely was the way. But jan statement has totally thrown us.



And no charges nor has he gone over his NEW limit. But according to snowball calculator he will even by paying the mimimum????

Shelldean

Also the woman in the phone said his mimimum payment was the interest PLUS £5 so if thats true his balance should go down by £5 even if the interest remained the same??? not increase?

oscar52

Dont throw the rotten veg yet - I work for MBNA

It is due to the number of days in his statement cycle. The November statement (witout looking) probably had 29/30 possibly 31 days - However, due to the number of bank holidays due to Christmas and New year, the January statement would have had 34/35 days - this is the reason for more interest and the higher minimum payment.

Shelldean

yeah she did mention that the number of days would have a bearing on it.
She said Dec had 29 days whilst January had 32.
BUT surely the mimimum payment plus £5 should reduce the balance not increase it. And WHY does the snowball say it will never be paid?????

Shelldean

And as they've reduced his limit without him knowing ( he doesn;t read his statments!!!!!! DD set up for mimimum dnd he knew he'd not spent on it)
What would've happened if he gone out in November ( it was reduced between Oct and Nov Statements) and spent more and gone over his new limit? the one he hadn;t been informed about

oscar52

Shelldean wrote: »

yeah she did mention that the number of days would have a bearing on it.
She said Dec had 29 days whilst January had 32.
BUT surely the mimimum payment plus £5 should reduce the balance not increase it. And WHY does the snowball say it will never be paid?????

Literally because of the way they structure theirt payments. The min payment on your last statement 114.32 - however, due to the cycle days and the extra interest, your balance actually increased - however, and again due to the min payment - 125.34 - this will reduce again next month - when you min payment will drop back to around 109.

Incidentally, have you contacted them to see if they can reduce your interest rate - they may not be able to do much, maybe 3 ir 4% - but remember they interest +£5 will remain the same, so you will need to make additional payments also (the equivalent of the saved interest)

oscar52

Shelldean wrote: »

And as they've reduced his limit without him knowing ( he doesn;t read his statments!!!!!! DD set up for mimimum dnd he knew he'd not spent on it)
What would've happened if he gone out in November ( it was reduced between Oct and Nov Statements) and spent more and gone over his new limit? the one he hadn;t been informed about

Probably the transaction would have been rejected - however, dependent on the shop/store and the amount they may have allowed it. And the reason for not informing you have already answered in essence. If they wrote to a customer stating the were reducing the credit limit from say £5K to £1.5K - that person could go out, the same day as recieving the letter and spend £4.5K

Shelldean

right so in theory most months will follow the pattern set between Nov & Dec, where the balance and interest reduced slightly? correct ???

And yes he's contacted them a few times about reducing the interest rate or jus helping as HSBC have by doing a 0% for 6 mths, but as OH so nicely put it they was about as much use as a chocolate fireguard!!!! Last time we tried was 2 Dec 09.

oscar52

Shelldean wrote: »

right so in theory most months will follow the pattern set between Nov & Dec, where the balance and interest reduced slightly? correct ???

And yes he's contacted them a few times about reducing the interest rate or jus helping as HSBC have by doing a 0% for 6 mths, but as OH so nicely put it they was about as much use as a chocolate fireguard!!!! Last time we tried was 2 Dec 09.

But did you write or phone?