Refund making £0 balance - Minimum payment still required?

firsttimestudent

Hi,

I have a £16.65 balance on my last month's Lloyds TSB Airmiles Duo card (December 2010). Early January, there was a refund of £16.65 back to my card, and I have not used the card since then. Hence, the balance is £0.

However, I understand that refunds do not count as payments.

I called Lloyds TSB, the agent seems not confident, but believed that I do not have to make any payments (or minimum payment)

Is he correct? Thanks!

Consumerist

Your statement tells you the minimum payment you should make each month. You would be well advised to act on what the statement says even if that gives you a credit balance.

jonesMUFCforever

I agree - make the payment and use the card to get rid of any surplus funds.

chattychappy

Consumerist wrote: »

Your statement tells you the minimum payment you should make each month. You would be well advised to act on what the statement says even if that gives you a credit balance.

Ha ha ha. Yep but often elsewhere it will say something about not making a payment that would put the account in credit.

Sometimes "payment" is poorly defined - though I agree in its natural meaning it probably doesn't include a refund from a supplier.

In the past when I've had this, I DIDN'T make a payment and the CC was happy. No charges, no interest. But that was years ago and we've had reports here that people have been charged.

A reason is that some people could use refunds to avoid making payment. Eg spend £500. Min due is £25 (say). Go to Argos. Spend and refund £25. Then cardholder claims £25 has been credited to the account. The systems aren't so clever to match charges and refunds.

For the sake of £16 quid, I would pay it. If you pay less (ie the minimum), then you might actually incur interest (between the payment date and the refund date). Then just spend it off or ask for a cheque.

Less hassle than trying to argue it after its gone wrong later.

pqrdef

Question is, if you don't have to pay the minimum payment, what exactly do you have to pay? If the balance isn't zero the answer isn't obvious.

I have the same problem with paying off in full, to avoid interest. I owe a lot less than my statement balance, so what do I need to pay? Settling the current balance to produce a nice round 0 isn't really an option, because the card is in frequent use and the BACS payments take days, so I wouldn't know how much to pay.

Degenerate

I believe the refund should be considered to have voided the original transaction - so in The OP's case one would say that the purchase never happened, the statement balance should have been zero, and no payment is therefore required. Applying this principle gets more complicated when carrying a balance though.

Wasteofspace

As said above, if the balance on the card is not zero you will still need to make the payment anyway. If it is zero, pay it to be on the safe side.

jackieblack

firsttimestudent wrote: »

Hi,

I have a £16.65 balance on my last month's Lloyds TSB Airmiles Duo card (December 2010). Early January, there was a refund of £16.65 back to my card, and I have not used the card since then. Hence, the balance is £0.

However, I understand that refunds do not count as payments.

I called Lloyds TSB, the agent seems not confident, but believed that I do not have to make any payments (or minimum payment)

Is he correct? Thanks!

We always pay our cc balance off by direct debit and whenever we have had a refund back on the card between the statement date and the date of the payment, the payment taken by direct debit is reduced by the amount of the refund.

eg statement balance of £100, steatement says £100 direct debit will be taken, a few days later refund of £20 goes on, direct debit only takes £80 from the bank (even if we've spent more since statement issued)

Consumerist

Degenerate wrote: »

I believe the refund should be considered to have voided the original transaction -

I disagree.

If you pay any interest at all (i.e. don't clear the balance in full) then interest will be charged from the date of the transaction until the date the refund is credited to the account. The transaction will not be voided.

The_Wise_Miser

The OP says the outstanding balance is zero. So no payment need to made, If it were not zero, then you would have to pay the outstanding balance, or the minimum payment, whichever is the lesser. No need to complicate it!

Consumerist

The_Wise_Miser wrote: »

The OP says the outstanding balance is zero. . .

The OP said "I have a £16.65 balance on my last month's Lloyds TSB Airmiles Duo card (December 2010)"

A subsequent (after the statement date) refund does not reduce the statement balance at all. Nor will it reduce the minimum payment demanded by the card company.