Direct Debit repayment options - Limited !!

clockerharvey

I have had a Virgin credit card which over the last 9 month interest-free period has allowed me to steadily reduce my balance by selecting a sensible repayment amount [£80] by direct debit which is neither the minimum payment nor the full amount. This replaced a Cahoot card which I also used to pay off 75 pound per month.

I have now transferred the balance to Capital one and when I called their call centre to set up a direct debit, of a similar amount, I was told that my only options were either the minimum payment OR the full amount.
Obviously the latter would be pointless for an interest-free card and the former would take an eternity to pay off.

Is there a conspiracy here to ensure that the customer still has a significant debt at the end of the interest-free period or is is just adminitrative inefficiency in the way the account options are presented?

If Virgin can offer an amount of the user's choice, why not Capital One?

What was more surprising is that even Nationwide can only accept the two extreme options - aren't they "proud to be different" ???

Have others found this to be frustrating as well??

..

Steve Harvey

mountainofdebt

I have a feeling that provided the payment reaches your account 4 clear days before the direct debit is due to be made from your account then the dd won't actually be taken (if that makes any sense!)


So what I would do is set up a standing order for the amount you want to pay so that it reaches your account 4 clear working days before the due payment date - although I appreciate that you may have to check beforehand to make sure that they don't take the dd as well!

MarkyMarkD

Mountain

Different card companies deal with "additional" payments differently - some take the DD as printed on your statement irrespective of any subsequent payments, whilst others net the two off.

It's hard to find out which way each company does it without asking.

Clocker - I don't understand your problem at all, TBH.

The only sensible thing to do is to pay the minimum (by DD) whilst on 0%, and then pay the maximum you can afford thereafter. There's no point paying more than the minimum whilst on 0%.

Most companies will only do minimum or full balance DDs, but you can always set up a standing order to pay a fixed amount if you prefer - and have no DD at all.

clockerharvey

My point was that I am wanting to pay off my balance gradually and painlessly - not just keeping it steady,

Steve

Paul_Herring

Harvey wrote:

Is there a conspiracy here to ensure that the customer still has a significant debt at the end of the interest-free period or is is just adminitrative inefficiency in the way the account options are presented?

The latter. (The cynic in me says 'both' however..)

Your best bet to do what you want to do, is to set up the minimum payment by DD (so there's no possibility what-so-ever of late payment charges,) and set up an additional SO (Standing order) to pay any extra you want to pay. I'd set the date for this to be just after the DD comes out to try and make sure that the extra payment isn't counted against the next DD. Keep an eye on the amount that they take as DD on the next statement to see whether or not they do in fact count the extra payment or not. If they do, you can increase the SO to the amount you want to pay, else keep it as the difference between the 3%(or whatever) and what you eant to pay.

However, if you're self-diciplined enough, what you could do is wait to set up the additional SO just beforethe 0% period expires, saving any extra you would pay in the meantime in a savings account to earn interest. Do a one off payment with what you've saved (+interest) shortly before the 0% expires. This assumes that you don't get another 0% (fee free?) card at the end of that period. If you end up with another card but with a fee, you'd be best off using the saved sum to pay off the debt anyway since the next fee will wipe out any interest you'll have accrued.

King_Of_Fools

You will find that the minimum payment on Capital One is a lot more than the minimum payment on Virgin, in any case.

Wyndham

Paul_Herring wrote:

Your best bet to do what you want to do, is to set up the minimum payment by DD (so there's no possibility what-so-ever of late payment charges,) and set up an additional SO (Standing order) to pay any extra you want to pay. I'd set the date for this to be just after the DD comes out to try and make sure that the extra payment isn't counted against the next DD. Keep an eye on the amount that they take as DD on the next statement to see whether or not they do in fact count the extra payment or not. If they do, you can increase the SO to the amount you want to pay, else keep it as the difference between the 3%(or whatever) and what you eant to pay.

Or - just set up a standing order instead of the direct debit. You only have to pay the minimum, you don't have to pay it by direct debit. Alternatively, you could make payments with a debit card, where you can choose the amount (subject to the minimum repayment, of course). This is how I do it as I'd rather be in control of what I'm paying them rather than relying on a direct debit, but that is a personal choice and you have to be diciplined.

frugglewump

I gave up on Direct Debits when barclaycard told me they couldn't move the day or guarantee a particular time frame.

I do everything by standing order now - that way i get to pick the day & the amount. (Also I trust me to set it up correctly).As long as the SO date is 4/5 days before the deadline there should be no problems doing it that way.

DOZYMARE

Hi Clocker,
here's what I do in similar situations. I set up the dd for the minimum. Then I use internet banking and pay any additional sums as and when I wish direct to my card by bacs. With a standing order it is set at a certain amount each month and it is a hassle to keep changing it. By doing payment via online banking you can decide how much you want to pay and when and no third party is involved.

Astaroth

Yup - same here, DD for min payment to avoid ever having to pay fees and then made additional payments at my leasure as there is no time pressure for either risk of fees or interest.

bunking_off

So long as you can be disciplined, the best thing to do is have a DD for only the minimum amount during the 0% period. If you have extra money that you'd want to reduce the balance with, DON'T. You're paying 0% on the card so won't get any benefit by having a lower balance. Instead, put it into an interest-paying savings account instead.

At the end of the 0% period, use the savings you've accrued to reduce the balance.