HBOS minimum repayments?

Velma

Hi was just wondering if anyone else is having probs with the minimum payments HBOS are requesting?

Got this months statement and it shows the minimum payment for last month as £50.93 yet they added £61.35 in interest!!!! :eek:

Next month if I only make a minimum payment I'm still not going to cover the interest. :mad:
I thought that min repayments were supposed to cover at least the interest and a bit more - going to have to set up a standing order or I'll never get it cleared. Between this and my OD charges at £1 a day I can't wait till I get this debt paid off.....

OK I've had my rant now!:D

DarkConvict

Check your contract, i believe min payments are usually like 2% of balance or £5, whichever is higher. Obviously 2% of a big balance can be less than interest when CC rates can easily go between 19-35%.

I think new CC regulations coming in are looking at making the min payment to be the interest + % of balance.

Remember these are your accounts, you are meant to be a responsible borrower as much as them a responsible lender. Make many payments to top it up.

http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

Poosmate

Hi Velma, I've had similar with my MBNA CC although the interest charged was just slightly less (I'm talking pennies rather than pounds) than the minimum payment. This doesn't happen every month though.

Have you got statements from previous months that you can compare?

Also, have you used your card since the last statement on which you were told your minimum payment would be £50.93? Also check on that statement what the estimated interest for the next statement is.

See they can only take payment of what they've told you they'll take giving you the necessary notice but they only estimate the interest because they don't know if you will go on a spending spree and max the card so of course you'll pay more interest.

Hmmm, just thought about that, if you maxed your card out this month, you wouldn't be charged interest on that bit of the debt until next month would you? Because you get so many days interest free to pay it off (56 days?) I wouldn't know because I've never had a CC where I can pay off the full amount each month!

OK, so the thing to do then is to check the spending on the card for the month prior to your current statement.

I think I've confused myself so heaven knows what I'll do to you! lol

Sorry, I know what I mean but I just can't explain it!

Poo

Poosmate

Oh! I just had another thought, don't worry it's not a confusing one!

Have they put up the interest rate? Could that account for it?

Poo

DarkConvict

Hmmm, just thought about that, if you maxed your card out this month, you wouldn't be charged interest on that bit of the debt until next month would you? Because you get so many days interest free to pay it off (56 days?) I wouldn't know because I've never had a CC where I can pay off the full amount each month!

Interest on my CC is charged if you fail to pay the bill in full. Bills are done on the 26th of a month for Abbey, and payment taken on 23rd. So if i buy an item on 27th. It takes a month to get onto a bill, then you have just under a month to pay. Obviously buying an item on the 24th takes 2 days to get on the bill and 1 month to pay. So items get between 1-2 months interest free.

^^
i think that is right, this is why i hate credit cards. Debit cards is so much easier to track when money you spent on day x is actually paid.

Oh! I just had another thought, don't worry it's not a confusing one!

Have they put up the interest rate? Could that account for it?

Nice idea, but i doubt it as they have to give 30 days notice, so the next bill would (or should as your getting at) be charged at the new rate.

Poosmate

Poor Velma's probably well confused now!

I see what you mean DC. I think what I'm trying to say is that your minimum payment is based on what the balance is on statement date before any spends that are not yet accruing interest is added.

Whatever or however, your minimum figure is an actual whereas your interest for the next statement is an estimate.

It would be interesting to know from the previous statement, what the estimated interest was.

What was estimated on my last MBNA CC is what was actually charged but I haven't used the card (nor will I). Next month should be interesting as the estimated interest is £1 more than this month even though I now have a lower balance. They increased the interest rate by 2% last month but I wrote to them stating that I didn't accept the rate increase - will wait and see and keep an eye on it.

Poo

Velma

Thanks guys for the replies - just double checked my last two statements and the interest rates have increased by 5%!!!:mad:
Didn't receive notification of this or I would've opted out of the increase (which I've done with my egg card) That must be why the payments are all to pot:( It does say on my T&C's that min payment is interest + £5 but that doesn't seem to have happened for the last 2 months...

I'll phone tomorrow to see what can be done. Unfortunately I used my card last month for some food (the princely sum of £12.59) so technically I've agreed to the increase but hopefully I can sort something out.

I really can't wait till I get rid of these ghastly CC's of mine. I'm barely keeping afloat as it is without interest rates etc going up....
Good luck with MBNA Poo!!! :beer:
Off to find more stuff to ebay....