LTSB CC Interest Advice Please

kathyd_2

I know nothing about CC so this may be a case of 'fools rushing in'.

My son has a CC with LTSB and he has just checked his account online as he is due a statement. He has made no purchases on the card since May/June last year (his statements back this up and I have his card as he got himself into a mess) The interest has gone UP this month by about £14. Could someone please take a look at the following statement extracts for me and tell me if there is anything odd?

Sept Statement: (min required £80)
Payments rec. in Aug. £300
Interest £37.68
New Balance £3997.68

Oct Statement: (min required £47)
Payments rec. in Sept. £1725 (£1500 being M&S More transfer)
Interest £33.48
New Balance £2306.16

Nov Statement: (min required £44)
Payments rec. in Oct. £175
Interest £28.94
New Balance £2160.10

Dec Statement: (min required £42)
Payments rec. in Nov. £130
Interest £25.51
New Balance £2055.61

Jan Statement: ~no paper bill yet - online info ~ (min required £39.54)
Payments rec. in Dec. £150
Interest £39.54
New Balance £1945.15

There are 3 points of interest for the Jan statement. 1) The interest has actually increased from previous months when the balance is reducing 2) The minimum payment required is the same amount as the interest and 3) The minimum payment required is usually rounded up/down to the nearest £ - not so in this case.

Do I have reason to be concerned or should my son just wait until he receives the paper statement. I would appreciate your opinions on this.

Afahmaep

I think you need to look back further probably Dec 05 / Jan 06. Was the initial debt subject to a 0% offer of some kind for 12 months?

kathyd_2

Afahmaep wrote:

I think you need to look back further probably Dec 05 / Jan 06. Was the initial debt subject to a 0% offer of some kind for 12 months?

No. He only took the card out about March 06 and racked up the debt between that time and about May/June 06 (see what I mean about getting himself into a mess :rolleyes: ). Used it to buy furniture for a house he was supposed to be sharing with his GF but she didn't move in and they split up and he moved back home, selling the furniture for a fraction of what he paid for it.

As you can see the last time he had anywhere near that monthly interest was when there was a balance of almost £4000 (his limit was £4500).

CLAPTON

it may well be worth waiting for the actaul bill to arrive, the most obvious reason that this might happen is that there has been an increase in their rates of interest...many CC companies have jacked up the cost of borrowing recently.

usually the rate(s) on interest are shown on the statements somewhere

greyteam1959

Looks like the interest rate has gone up for some reason and the reason must be there somewhere in the small print.
It must be that a special deal has come to an end.
Best advice is as always contact the credit card company and find out.
You could always try and get a better deal from them or better still pay off the card for your son and make him pay you back in monthly installments.
By doing that you will save him loads of money

kathyd_2

mervyn11 wrote:

Looks like the interest rate has gone up for some reason and the reason must be there somewhere in the small print.
It must be that a special deal has come to an end.
Best advice is as always contact the credit card company and find out.
You could always try and get a better deal from them or better still pay off the card for your son and make him pay you back in monthly installments.
By doing that you will save him loads of money

I've already loaned him over £3000 to keep him from getting a county court judgement. If I keep bailing him out he's never going to learn :rolleyes:

greyteam1959

Sorry you never said you already loaned him money.
I would you you have loaned him plenty and time has come for him to get sorted before he has some real problems with his finances.
Hope all works out for you

kathyd_2

CLAPTON wrote:

it may well be worth waiting for the actaul bill to arrive, the most obvious reason that this might happen is that there has been an increase in their rates of interest...many CC companies have jacked up the cost of borrowing recently.
usually the rate(s) on interest are shown on the statements somewhere

Yes, I think this is his best bet. It just seems such a hike from last month's interest and to my knowledge he hasn't received any notification to say his interest has increased.

YorkshireBoy

What was the "estimated interest next month" figure on the December statement?

Also, LTSB statements show the monthly rate for purchases (my Platinum card does anyway). Compare the statements and see if there are any changes towards the back end of last year - especially between the November and December statements.

kathyd_2

YorkshireBoy wrote:

What was the "estimated interest next month" figure on the December statement?

Estimated interest £25.07.

Account information reads: Your current monthly rate of interest is: 1.240% for purchases and 2.075% for cash

Just looked briefly through the statements again and the estimated interest figure is usually about right, give or take a £ or two

Ali-OK

Bit of a long shot, but Llloyds do daily interest and have a pattern of the number of days each month, ie. 28, 30, 33, 28, 30, 33 - therefore I used to see interest go up and down, even though the balance was consistently reducing. So could it affected by either additional number of days in the statement period (not noticed in the previous 3rd month due to the large reduction courtesy of the M&S transfer), or it could also be affected if the payment was made further from the statement date than you'd normally do.

Just a couple of things to consider, though that jump does sound more like an interest rate rise.