Virgin MasterCard minimum payment has increased by over £100, why?

Eddie_Catflap · 10 April 2011 at 6:55PM

Hi all,

I have a Virgin MasterCard with around £8500 outstanding on it. I had been successfully reducing this debt as the minimum payment was around £150 and I was able to over-pay by £100 each month.

I checked my latest April statement today and, to my horror, found that my minimum payment has increased to £260! I don't recall any literature from Virgin explaining the hike in minimum payment so I just wondered if any one else has found themselves in the same situation? If so, how are you coping with it?

I am now seriously considering using a couple of cards that I have zero balances on to transfer as much of the balance as possible. It makes me weep when I think about how much interest I have paid Virgin over the years :-(

Many thanks in advance.

teeni · 10 April 2011 at 7:01PM

There are loads of threads on here about this, the minimum payment now consists of interest charge plus 1% of the balance hence the increase in minimum payment. Letters were sent out a while ago, we had one about late feb early march time.

Eddie_Catflap · 10 April 2011 at 7:10PM

Ok thank you, apologies for my ignorance. So does that effectively mean that my minimum payment will pay off more of the debt rather than covering the interest charge plus a few pounds? If so then i can live with that, I am just concerned that a minimum payment of £260 will only cover an interest charge of £257 and £3 of the actual debt ;-)

SnowTiger · 10 April 2011 at 7:24PM

Eddie_Catflap wrote: »

Ok thank you, apologies for my ignorance. So does that effectively mean that my minimum payment will pay off more of the debt rather than covering the interest charge plus a few pounds? If so then i can live with that, I am just concerned that a minimum payment of £260 will only cover an interest charge of £257 and £3 of the actual debt ;-)

Yes, it should mean the debt is paid off quicker.

Are those figures you posted real or just an example off the top of your head?

teeni · 10 April 2011 at 7:26PM

Hi yes that is right, now the minimum payment will cover all the interest charged that month plus 1% of the balance of the debt. This is apparently the way all new credit cads are charged, but virgin are one of the few that applied the change retrospectivly to all existing card holders.

Eddie_Catflap · 10 April 2011 at 7:26PM

Just found an article on the MBNA website which answers my question (the forum won't allow me to post the link, sorry), thank you again.

Eddie_Catflap · 10 April 2011 at 7:28PM

I hate to be cynical but it is a breath of fresh air to have a credit card company readily implement changes that will assist their customer's finances rather than their own coffers!

teeni · 10 April 2011 at 7:29PM

SnowTiger wrote: »

Yes, it should mean the debt is paid off quicker.

Are those figures you posted real or just an example off the top of your head?

my virgin card only paid about a fiver off the debt before if only minimum payment made, some months like feb just gone if i had only paid the minimum ( i never do) it woudlnot have even covered the interest charged.

I think the change is a good idea in principle, but very hard for people whose budgets are very tight to meet the increased charges.

Eddie_Catflap · 10 April 2011 at 7:36PM

Shocking isn't it?! :-( Thankfully I stopped spending unnecessarily on my Virgin card when I had my lightbulb moment a year or so ago and have made good progress on getting shot of the debt (starting by living within my means for a start!)

Thanks again for your help :-)

michaelvintner · 10 April 2011 at 10:25PM

It is a good idea in principle and I for one am glad of it. No longer will I have to make an additional payment to bring my MBNA balance down. I have a direct debit set up for the minimum repayment.

However it is also another devious trick by MBNA to catch people out and force people who were managing to make their monthly repayments default.

Another dirty trick by a devious dirty company. MBNA are scum and I can't wait until I pay them off and throw their card in the rat infested scum sewer where it belongs.

chattychappy · 10 April 2011 at 10:37PM

Virgin MasterCard minimum payment has increased by over £100, why?

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