credit card minimum payment

fionaguthrie

Hi

I don't know if I am being naive but I thought that if you paid the minimum it covered the interest and the balance would not increase.

I have two credit cards which have payment protection insurance but the balance is creeping up and up each month even though I pay the minimum. I know I need to pay more than this but for various reasons this is not possible at present. They are now nearing the limit due to this increasing of the balance each month.

Please can anybody advise. I don't have a magic wand to increase my income at present in fact I am now earning what I did in 1994. Can credit card companies do this?

Thanks

Fruit_and_Nut_Case

I'm not sure what you're asking Fiona. You say you can't afford more but you also seem to be asking for the minimum payment to be increased to fully cover the interest. You can't have it both ways.

joedenise

If you can't afford any more than the minimum payment then I think you need to get rid of the PPI and in fact claim it back if it was missold.
If you want to keep the PPI then you need to up you payment to include the cost of it in addition to the minimum payment, otherwise your balance will just keep increasing as you have already found out.

hth.
Denise

pjread

I thought minimum payments pretty much always covered a little more than the interest - can I ask what card you've got?

fionaguthrie

I have an AA Visa with which the minimum payment covers the cost of the interest.

A Barclaycard with which the minimum payment covers the cost of the interest.

A Mint Visa card with which the total seems to increase by £13.50 a month.

A Nationwide Visa card with which the minimum payment covers the cost of the interest.

At the moment I can't remember the other one which increases each month.

How do I go about claiming back the PPI. I would dearly love to have these cards cleared but I have 2 jobs and am barely scraping through each month. Bankruptcy is not an option at the moment either.

What else could I do?

Thanks

YorkshireBoy

I believe the minimum payment calculation excludes the PPI charge.

What's the APR on the Mint card? And is the payment calculation still 2.25% of the balance?

Are you saying you have another card but can't remember who the provider is!? Or do you have several others, and one of them's the same as Mint?

I think you need to visit the debt-free wannabe board for more detailed help on your general financial situation.

Typhoon2000

As it stands at the moment, the minimum payment is what you must pay each month not to be hit with penalty, nothing more nothing less. As to if it reduces your balance or not will depend on the interest rate you pay and how quickly after the statement is generated you make your payment.

There are moves afoot to change this so that for all cards, the minimum payment will reduce the balance, so expect the minimums required to go up for those on high interest rates when that happens.

no_more_cards_for_me

Typhoon2000 wrote: »

so expect the minimums required to go up for those on high interest rates when that happens.

Can't happen soon enough, then those who are over-borrowed will be forced to work to a proper budget for more than the absolute minimum payment. Hopefully we will then see a return to saving then spending, rather then going into free fall with a credit card.

Credit cards can be a useful tool but so many don't know how to use them.

Now that we are seeing 48% of applications declined, credit limits slashed and minimum payments increased to ensure they eat into the debt maybe the love affair with the flexible friend will come to an end.

Or maybe people will just borrow on more expensive cards and not face the fact they are living beyond their means. :eek:

Stoozers might loose out a little on interest due to minimum payment rises but regrettably they are tarred with the same brush despite the fact they aren't actually "borrowing".