MBNA (AA) credit card sleight of hand

prowla

InsideInsurance wrote: »

Unfortunately, your laymans term example is overly simplistic. You have agreed to pay an amount against each statement so to do extend your laymans examples it is more like borrowing £100 from your mate and agreeing, explicitly, you will pay them a tenner each week. In week one you give then a tenner, week two you give then twenty but in week three you give them nothing.

Obviously your argument is that it is week three so by now you have should have given them £30 and you have but the problem is that you didnt agree to give them £30 by week three but explicitly you'd give them £10 a week and you have failed to meet this because you gave them nothing in week three.

Likewise with a credit card you agree to pay against each statement. If you pay before the statement is created then actually you are still paying against the old statement even if it is made after the payment due date.

Yes, and that is the catch.

They have been paid the money they would have had, but as I said, I am being penalised for paying early.

(In your analogy, it would be that I agreed to pay the tenner every Friday, but one week I paid it early, on Thursday instead, and then they've said "aha - you didn't pay us on Friday though!".)

dazza.mk

prowla wrote: »

Yes - I am talking about additional payments, not arrears.

What you say in your 2nd paragraph is not the case; the positive balance is not taken as a payment towards the next invoice, and that is what I refer to as a "sleight of hand".

For example in August last year I paid £100 on the 1st, which was a late payment for the July (my error, as I say), and I also paid £100 on the 8th, but that was not accepted as a payment towards August (actually August's invoice was dated the 8th, but payments were only accepted from the 9th).

Basically there is a window for payments which starts the day after the invoice's issue date and ends the day before the invoice's due date, and payments made in the (approx 1 week) gap between the two are in a kind of limbo; they reduce the overall balance owed but are not deemed to be a payment on either invoice.

A credit card statement is just that, a statement of account, not an invoice, by treating it as an invoice you are only confusing yourself.

You are not paying an invoice similar to an electric bill, you are repaying a balance under a credit agreement.

prowla

dazza.mk wrote: »

A credit card statement is just that, a statement of account, not an invoice, by treating it as an invoice you are only confusing yourself.

You are not paying an invoice similar to an electric bill, you are repaying a balance under a credit agreement.

Bill/invoice/request for payment/statement - I just slipped into the terminology being used.

The point is that there is a payment window that opens the day after the statement date and closes the day before the statement due date, and paying into the account in advance of the opening date is not deemed to be a payment off that forthcoming statement.

dazza.mk

prowla wrote: »

Bill/invoice/request for payment/statement - I just slipped into the terminology being used.

The point is that there is a payment window that opens the day after the statement date and closes the day before the statement due date, and paying into the account in advance of the opening date is not deemed to be a payment off that forthcoming statement.

No..... you are still treating it as an invoice, whereas different rules apply to what is effectively a repayment plan under a credit agreement.....

By paying early you will have reduced any interest due (outside of interest free periods) by reducing your balance early and, reduced the minimum payment due on your next statement by reducing the opening balance.

So you've already benefited by paying early

david39

Irrespective of how many payments you make in any month, your statement always tells you a minimum amount that you have to pay and when to pay it by.

If you did not need to make a payment in any month, the statement would show £0.00 in the Minimum Payment section.

MonkeyMad

!!!!!! this isn't rocket science! You get sent a statement every month that shows the balance you carry on the date of the statement. This balance is determined from the balance carried over plus all the debits minus all the credits since the last statement date. You are expected to make a minimum fractional payment against that particular statement balance regardless of how the figure was arrived at by a set date to avoid incurring interest and charges - this is the 'invoice' you keep rattling on about.

If you have reduced the balance at statement issue by making a payment early you will still be expected to pay off a proportion of what is left. There is no limbo, slight of hand, or anything else and is the way EVERY credit card works. If this is all too difficult for you, in future just make a payment when you get the bill.

thenudeone

davp wrote: »

Do you run a CC company?

No. I just take care to understand what I agree to.

prowla

MonkeyMad wrote: »

!!!!!! this isn't rocket science! You get sent a statement every month that shows the balance you carry on the date of the statement. This balance is determined from the balance carried over plus all the debits minus all the credits since the last statement date. You are expected to make a minimum fractional payment against that particular statement balance regardless of how the figure was arrived at by a set date to avoid incurring interest and charges - this is the 'invoice' you keep rattling on about.

If you have reduced the balance at statement issue by making a payment early you will still be expected to pay off a proportion of what is left. There is no limbo, slight of hand, or anything else and is the way EVERY credit card works. If this is all too difficult for you, in future just make a payment when you get the bill.

Calm down - if you read the OP, you will see that I referred to it as a "statement" there, and I only referred to it as an invoice in response to somebody else's post. I'll now be double-sure to use "statement" regardless, or maybe "bill" since that is the term they use. (Incidentally, the terms "bill" and "invoice" are often used interchangeably, though invoice tends to be used more in a business sense).

It doesn't matter in future, because I've paid it off. Actually I'm in credit now, because I paid the outstanding sum and then they refunded the last charge. (I hope they don't charge me a penalty for being in credit too!)

The sleight of hand (sleight has an 'e', BTW) is that advance payments are not counted towards the next bill.

Feel free not to contribute if you don't want to.

MonkeyMad

I'll contribute all I like thanks, more so when I spot rampant cobblers. Correcting my spelling (which make you look foolish) does not alter the fact that you have come here complaining about your payments not counting in advance where any sensible person can see that under the T&Cs this would be nonsensical, as monthly bills are based on balance outstanding. To portray this as somehow underhanded (and to mention it again above) makes you look even more foolish. If you are stupid enough to make a payment early, and then have to make another minimum payment, that's your problem. But no doubt the bank has actually designed this as a way to get more money out of you, what with their confusing accounting and all.

I'm surprised no-one has suggested this is the kind of thing we ought to be teaching children in school, as it is such a difficult skill to pick up. Oh wait, end of primary school deals with percentages, start of primary school covers basic arithmetic and dates.

molerat

It is all contained in chapter 1 of Understanding Credit Cards for Dummies