Changes to way minimum payments are calculated...

chattychappy

Percy1983 wrote: »

It is a new minimum all cards must charge, as it is some cards won't be affected as they already charge more.

The only requirement is for new accounts to conform to the new minimum payment rules.

When the change in rules was discussed it was decided not to apply it in respect of existing accounts, one reason was precisely the situation of the OP.

MBNA have made a commercial decision in respect of existing accounts.

izools

Tixy wrote: »

You don't spend much time on the DFW board in that case :)
You should see the number of people posting they are still being charged and what can they do about it (often Lloyds customers - they seem to be the current worst offenders).

You're right, I don't.

Perhaps I will spend more time there and glean more useful knowledge

Especially if we get a repeat of this beautiful thread by Zincoxide:

https://forums.moneysavingexpert.com/discussion/741653

I've never laughed so hard in all my life! :rotfl:

Tixy

Always a way to brighten up someone's day, especially anyone being hassled by debitas specifically.
First time I read it was at work - not a good idea, nobody could understand why my 'work' was amusing me so much!

Percy1983

chattychappy wrote: »

The only requirement is for new accounts to conform to the new minimum payment rules.

When the change in rules was discussed it was decided not to apply it in respect of existing accounts, one reason was precisely the situation of the OP.

MBNA have made a commercial decision in respect of existing accounts.

True, but many card providers won't like having 2 sets of T&C's running so will move all across.

chattychappy

Percy1983 wrote: »

True, but many card providers won't like having 2 sets of T&C's running so will move all across.

Well I'm sorry if they don't like it but of course they have been doing this since 2009 anyway.

They manage to have multiple types/brands of cards, multiple interest rates for different customers, multiple promotional rates running for individual customers, airmile reward schemes etc.

That's before you consider all the various arrangements people enter into when they get stuck.

They could certainly cope if they wanted to.

I'm guessing they've realised that now new cards must insist on at least 1% they don't need to compete on minimum payments of less that this anymore. It is also a good way of generating extra revenue. People who currently service their debt without a problem may end up with late payment charges etc and losing their promotional rates.

Percy1983

chattychappy wrote: »

It is also a good way of generating extra revenue. People who currently service their debt without a problem may end up with late payment charges etc and losing their promotional rates.

Trying not to be arguemental, but if people end up paying there cards off quicker they will also lose some revenue.

I just don't see how this is any different to anything else, you take credit on variable terms, if those terms change you need to move with them. If you put yourself in a position where you can only service minimum payments you are putting yourself in a risky position, as with all risky positions things can come crashing down.

izools

Tixy wrote: »

First time I read it was at work - not a good idea, nobody could understand why my 'work' was amusing me so much!

Same, same. :rotfl:

izools

Percy1983 wrote: »

Trying not to be arguemental, but if people end up paying there cards off quicker they will also lose some revenue.

I just don't see how this is any different to anything else, you take credit on variable terms, if those terms change you need to move with them. If you put yourself in a position where you can only service minimum payments you are putting yourself in a risky position, as with all risky positions things can come crashing down.

That, and those with a promotional balance won't be affected as it is the "plus interest and charges" element that is causing those with high APRs & Balances to post their dis-satisfaction on these boards.

I still stand by my view that those who can't afford 1% of the balance + interest for that month were already struggling, already had an unmanageable amount of debt, and were already in a position they need to get out of.

This change in payment requirements will prevent people from incurring more interest than the minimum payment works out to.

It will also prompt those who have grossly overspent to either re-do their budget or come to a reduced payment arrangement with the creditor.

Certainly I stand by my opinion that a customer who was previously paying under 1% of the capital + interest each month should NOT have their account reported as in "Good Standing" (i.e. paid on time) on their credit file. Clearly their account is not in good standing as they can't even clear 1% of the capital each month and other creditors need to be able to see this quickly and simply from soneone's credit file by way of an AP marker or such like.

chattychappy

izools wrote: »

That, and those with a promotional balance won't be affected as it is the "plus interest and charges" element that is causing those with high APRs & Balances to post their dis-satisfaction on these boards.

In fact those with a lower APR are relatively more affected.

Eg on £10,000 with a LOB 6.9%, interest will be about £56. If you're currently on interest + £10 then the rise will be from £66 to £156.

I don't really take the view that someone who has cannot (or does not want to) meet this change is distressed. They might have savings bonds that are expensive/difficult to cash in early, they might be paying off a loan elsewhere which will soon end or be selling a house. People can responsibly plan to pay less than 1% off the capital of a particular card for periods of time in these circumstances.

Yes you can always say someone signed up to variable T+Cs. But bear in mind just because something is written in T+Cs doesn't make it part of the contract - courts can and do hold terms to be ineffective. Remember when you used to get charged £25 for a late payment until it was discovered that was (usually) illegal? There are a number of statutes and regulation which intervene to protect consumers.

I do believe this is open to challenge in respect of existing debt.Whether it happens or not is another matter. I believe bodies such as the OFT and even MSE might not wish to involved exactly for the reasons given here - that it is "good for you".

Blessy

Hi I have a capital one with £1,500 and I get charged about £44 interest a month (34% apr) plus about £33 on top which works out to be 2% plus the interest. If it gets put down to 1% then im happy