min payment

TOTHETEETH

hi all,
i have a credit card which has been maxed for a while , so i set up a direct debit which pays min payment every month, i have not been looking at statements for a while as it just depresses me. thinking all was in hand due to direct debit i was on the phone to the c card company, apparently my min payment hasnt been covering the interest so they have been heaping charges on top of the balance . i was told this was my responsability , i was under the impression the variable min payment by direct debit would ensure i avoided any charges but musnt be the case. can anyone shed any light on this dilema

[Deleted User]

It's certainly your responsibility to keep on top of your finances. But to the issue of the DD - what exactly is it set up for? Minimum payment? Or a fixed amount which you thought would cover minim payment?

Also - what is the minimum payment calculation on your card? It will say on the back of your statements.

Lastly - when did the DD stop covering the min payment amount>

TOTHETEETH

The direct debit was variable amount to cover min payment each month at 2.5% as i was led to beleive this would avoid me having any charges applies to my account

[Deleted User]

How is the min payment calculated? Does it say it is 2.5% of balance? Are you currently overlimit?

Just to be clear - has the DD definitely not been covering the minimum payment required? Check this by comparing the amount requested on teh statements against what has been leaving your account.

I am wondering if it's not that the DD isn't covering the min payment (since it clearly should) but that you have gone overlimit and the charges are for that.

chattychappy

If you're spending up to the limit, then interest will put you over the limit and incur charges. Is this the problem? These days (wasn't always the case) if you are not using the card anymore, the minimum payment should always exceed the interest for the month. So the balance should decline and you shouldn't face charges.

I hope posters that are so keen to recommend DD as a means of payment for those that have trouble staying on top of things will think about what has happened here. DDs really can encourage people to motor on in blissful ignorance of their position as they feel they no longer need to check statements.

Tixy

On some cards the minimum percentage won't cover the interest.
As your minimum is 2.5%, then if you APR is above 29-30% or so then it won't cover the interest.
Also if you haven't been checking your statements your APR may well have risen without you noticing.

Tixy

chattychappy wrote: »

I hope posters that are so keen to recommend DD as a means of payment for those that have trouble staying on top of things will think about what has happened here. DDs really can encourage people to motor on in blissful ignorance of their position as they feel they no longer need to check statements.

To be fair I think that the posters who recommend DDs so much probably also recommend opening and reading statements....

Any

chattychappy wrote: »

I hope posters that are so keen to recommend DD as a means of payment for those that have trouble staying on top of things will think about what has happened here. DDs really can encourage people to motor on in blissful ignorance of their position as they feel they no longer need to check statements.

Well, maybe we should start posting and advice of the kind:

"If you have ever forgotten to pay on time because you were very busy or your mother just died and you had your mind occupied with different things, it clearly shows you are incompetent and you should never as much as look at credit card... EVER."

That comment was absolutely unnecesary. If one is that ignorant as not to open statements and read them, DD won't save them, you are right.. but the fact is that they would have failed to manage their account much earlier without it.

chattychappy

Any wrote: »

That comment was absolutely unnecesary.

Are you some kind of moderator?

Any wrote: »

If one is that ignorant as not to open statements and read them, DD won't save them, you are right.. but the fact is that they would have failed to manage their account much earlier without it.

I would question whether the account was being managed at all. I'm not saying DD is always wrong. BUT, they do facilitate people hiding from their financial affairs and this is what happened here.

michaelvintner

Tixy wrote: »

To be fair I think that the posters who recommend DDs so much probably also recommend opening and reading statements....

It is normally quite useful to open and read your statement. How are you going to notice fraud on your account if you have not checked your statement in 18 months.

chattychappy

michaelvintner wrote: »

It is normally quite useful to open and read your statement. How are you going to notice fraud on your account if you have not checked your statement in 18 months.

Yep. Also I've seen it in the T+Cs that you agree to check statements and report inaccuracies.