Overlimit fee

SarahR77

Hi, I was hoping to get some advice.

I have an aqua credit card for which I have a direct debit set up to pay the minumum each month. This month the direct debit fee did not cover the interest and the interest put me over my limit and so I got charged. I had not done any spending on it since my last bill and was under the limit then. I have had a number of credit cards before and when I have a direct debit set up for the minimum amount this always cover the interest plus some on top. I should have checked my bill more carefully to see it all added up and have definately learnt my lesson. But ... is it worth talking to them as I genuinely thought that setting a mimum payment would cover what I owed that month espcially as I hadn't used the card since the previous bill.

Thank you
Sarah

YorkshireBoy

The minimum payment has to cover at least the interest shown on the statement. However, it does not take into account the interest which is to be applied on your next statement (a few days after your payment is collected).

The interest to be charged next month is termed "estimated interest" and should be shown on your statement. What did it say last month?...and did the actual amount charged differ from this?

Is there any way you can find an additional amount to get you a bit further under the limit to give you some breathing space.

But to answer your specific question, of course it's worthwhile calling them and asking for some goodwill.

SarahR77

YorkshireBoy wrote: »

The minimum payment has to cover at least the interest shown on the statement. However, it does not take into account the interest which is to be applied on your next statement (a few days after your payment is collected).

The interest to be charged next month is termed "estimated interest" and should be shown on your statement. What did it say last month?...and did the actual amount charged differ from this?

Is there any way you can find an additional amount to get you a bit further under the limit to give you some breathing space.

But to answer your specific question, of course it's worthwhile calling them and asking for some goodwill.

Thank you very much for your advice. The minimum payment on my october statement is £10 less that the estimated interest which was pretty much what they did charge. I should have noticed this as there clearly was going to be a problem if the interest was more than the payment the were going to take. I just hadn't expected it to be the case. There was no interest charge on my October statement as I had only put any spening on it a few weeks before.

I am going to pay off everything over my limit and a bit extra. I'm not normally so close to my limit I just had an unexpected expense last month but I thought as long as I did not spend over my limit I would be ok. I will call and ask, do you think it is likely that will waver the charge as goodwill as this is first time?

Sarah

I

YorkshireBoy

Something doesn't sound right. Can you post up some statement numbers? eg...

October statement:
Balance
Interest
Minimum payment
Estimated interest next statement
Payment due date

November statement:
Balance
Interest
Minimum payment
Estimated interest next statement
Payment due date


What's your APR?
What's the minimum payment calculation?
Any cash advances or are they all purchase transactions?

SarahR77

YorkshireBoy wrote: »

Something doesn't sound right. Can you post up some statement numbers? eg...

October statement:
Balance
Interest
Minimum payment
Estimated interest next statement
Payment due date

November statement:
Balance
Interest
Minimum payment
Estimated interest next statement
Payment due date


What's your APR?
What's the minimum payment calculation?
Any cash advances or are they all purchase transactions?

Sorry if I've explained it wrong, I find this all a bit confusing.

October Statement:
Previous Balance: 0
Closing Balance:441.63
Next Month's stimated interest: £15.15
Payment due £5.00 on 4th November

November Statement:
Previous Balance: £441.63
Closing Balance: 776.01
Payment received: £5.00
Interest added on the 4th £21.40
Overlimit fee £12
Estimated interest for next statment £18.49.

The interest rate is 35.95%, it was all spending no cash advance. I spend 305.98 on the 19th which I see would not have gone onto my october statement so I guess that's where I went wrong.

Thank you
Sarah

c-m

Your minimum payment should not be the same for those two balances.

Are you sure you haven't set up a fixed DD? I know Barclaycard allows this, but their minimum always covers the interest.

SarahR77

c-m wrote: »

Your minimum payment should not be the same for those two balances.

Are you sure you haven't set up a fixed DD? I know Barclaycard allows this, but their minimum always covers the interest.

Oh sorry! The payment for November is £41.16. I was planning on paying before then to get under my limit but was hoping it might be possible to avoid the overlimit fee. Thank you.

Tixy

The rules that came into force in March that said the minimum payment must cover the interest, charges plus 1% of the balance were for new customers only. Presumably your credit card was taken out before then?

What does your T&Cs say in relation to the minimum payment? maybe yours do not say it will always cover interest?

What is the limit on your card? presumably the over limit has been caused by the significant spending between the October statement and the November statement?

c-m

Best bet is just to call them and have them explain what is going on. Your minimum fee should cover the interest (and probably does). Interest is probably added at the end of the statement date, before payment is taken. So if say your limit is £120 (and you are at the limit) and APR is 10% then a month's interest of £1 added at the end of the month would take you over the limit until payment is collected.

That is what has most likely happened.

If you call and plead your case they might drop the charge this once.

I'm sure many will be along and tell you that you really shouldn't be using that card for spending at 35.95% - but really that's your decision

SarahR77

Tixy wrote: »

The rules that came into force in March that said the minimum payment must cover the interest, charges plus 1% of the balance were for new customers only. Presumably your credit card was taken out before then?

What does your T&Cs say in relation to the minimum payment? maybe yours do not say it will always cover interest?

What is the limit on your card? presumably the over limit has been caused by the significant spending between the October statement and the November statement?

Thank you for your reply. I took the card out in September this year. I don't have my terms and conditions with me now only my statements. I will have a look for them when I got home. Hopefully if it does say that in them they might waive the fee. Do you know who made the rules about minimum payments?

Tixy

Ah if its a new agreement then it definitely should - have a read of this article - http://www.moneysavingexpert.com/news/cards/2011/02/the-credit-card-and-loan-shake-up-what-it-means-for-you The rules are new EU rules.

Credit card lenders must also ensure minimum monthly payments cover at least 1% of the outstanding debt plus all charges for new customers in a change that will be phased in by March.

On that basis you would seen to have a good case for them refunding the charge - and rectifying your credit file if you wouldn't otherwise have gone over the limit.
Next months minimum payment looks right and calculated in a proper way - the £5 one would seem to be an error on their behalf.