(Not) late payment on credit card - please help!

StudentAtKeele

This might be entirely my mistake, and if it is then please tell me, but I really don't think it is. It's for a Student Credit Card (though I'm now on a Graduate Account, having graduated this year) and the terms and conditions I refer to can be found here: lloydstsb.com / credit_cards/terms_student.asp
Please read it in full, but if not the main argument is at the end.

Background to this: due to being on minimum wage, I've had to use my credit card to spread the cost of fixing my 17-year old car, (i.e. pay for new tyres, the MOT and car tax all in the course of about 6 weeks, and I'm also having to get the brakes replaced this Wednesday). As a result, I wasn't able to pay the balance in full, but I got most of it paid within the 56-day grace period using the meagre savings I have, so didn't get much interest charged. As I couldn't make the full payment, I went through my budget, and worked out I could get the rest cleared within 1 or 2 months.

Now for the important part/problem: I get paid on the last working day of each month. My credit card statement always seems to get produced on the 5th of each month, and it says payment is due by the 1st of the next month. However, because I've only ever used my credit card for paying for things over £100 and always paid it in full, I didn't know EXACTLY how the dates work. Since the statement said payment was due by the 1st, I assumed that a payment made after then would count towards next month. So, having made a payment on the 25th of September, and the September statement saying that payment was due by the 1st of October, I then assumed that making a payment on the 2nd of October would then count towards October's balance/statement. Cue the old saying about assume, and when I got November's statement through it says there was a late payment.

Resolving the problem: I phoned Lloyds TSB and asked why there was a late payment charge. The first person I spoke to said no payment had been received after October's statement was generated, which is true, but payment had been made in October. The team manager I spoke to while disputing this says that the way all credit card companies work is that you're expected to wait for the statement to be generated before you make a payment. I didn't know this, so by making a payment 3 days before the statement was generated, I might have made a mistake, but I really can't be sure. However, seeing as the payment was deliberately made AFTER the payment was due to be made by, it was counted as an extra payment towards September's balance. In effect, I was being charged a late payment fee for having made a payment too early.

Getting my money back: Having paid the remainder of the balance in full earlier today, including the late payment fee, I then asked for the credit report to be amended so that it doesn't show as a late payment. The person said that because it's not the bank's error, they can't remove it. She was willing to refund the late payment fee and the interest and the cost of the phone call, all without me asking her to, and offer me £15 on top of this, but obviously having a late payment note on my credit report will probably cost me a lot more in the long run, so I didn't accept this to make sure that the Customer Relations department wouldn't be able to say the complaint had already been resolved.

Proof/evidence to back me up: Nowhere, either in the terms and conditions given above or on the back of the statement, does it say that a payment made after the due date but before the next statement is generated will be counted towards the current statement, but the team manager at Lloyds TSB says that is common practice for credit cards. Is there anything I can specifically say or use as evidence to get them to remove the Late Payment 'mark' (or whatever it's called) from my credit report?

AdamJK_2

Personally I feel the offer by Lloyds was far above and beyond what they are required to do (which is nothing) and I'm baffled as to why you wouldn't accept it.

Unfortunately you are entirely in the fault on this one and whilst I appreciate that in your eyes you have made the payment, what you have in fact done is make a double payment in the previous month.

If you're statement is produced on the 5th then your statement period is the 6th of the first month to the 5th of the following. Any payments made before the 5th count as the last statement period. If any payments are made prior to the statement being produced then it's just an additional payment.

It's all fairly standard stuff for all credit cards and it's not something that is hidden or not disclosed. Basically when your statement is produced Lloyds are asking for a payment to be made to the account within the next 25 days. You didn't do this so they have added a valid charge and reported it as such. Asking them to remove the report and them agreeing would just make a mockery of the credit report system.

Take it on the chin, use this as a learning experience and when you call to accept their more than gracious offer ask them about setting up a minimum payment direct debit to avoid future issues.

For the record I seriously doubt that a single missed payment on an account would have any noticeable effect on any future applications. Multiple missed payments would obviously be an issue particularly if the credit card reports cash advances in the same months.

oscar52

As above, it is your fault, but is a common misunderstanding with regards to the way in which the statements are produced and the account cycles.

I agree with Adam that LTSB went above and beyond what they had to do, and probably appreciated that it was a genuine error on your part.

One late payment would have next to no impact on your credit. Apart from an elite few, I expect most peopl will have one, maybe two reported ove rthe last 5 or 6 years.

Late payments only start to have a significant impact if they are happening on a regular basis, either indicating you are struggling with balnces, or that there has been a recent change in circumstances.

chattychappy

I agree, you were late. On this basis, the bank are free to let you off the charges but to change the credit report would result in an inaccuracy on the record.

It is true that all CCs work like this, but so what? It could be they are all wrong. So let's look at the argument.

You write:

StudentAtKeele wrote: »

Proof/evidence to back me up: Nowhere, either in the terms and conditions given above or on the back of the statement, does it say that a payment made after the due date but before the next statement is generated will be counted towards the current statement, ..

True. But nowhere does it say the payment will "count towards the next statement". Now this is contract law, a type of civil law. Both parties (you and the CC) are equal parties to a contract. A judge will look at the agreement and decide what was most likely to have been meant. If something really is unclear/ambiguous, then the benefit of the interpretation tends to go against the party that drafted it (the "contra proferentem" doctrine).

And in deciding whether you broke the agreement, it is not "beyond reasonable doubt" (as with criminal law) but simply whether it is more likely than not.

OK so what do the T+Cs say? From your link:

2. YOUR PAYMENTS

2.1 You must make a minimum payment by the payment date every month of an amount equal to the total of interest, any charges payable [...] and 1% of the balance shown in your statement [...]

2.2 [...]. Your statement will show the payment date and the minimum payment.

By 2.2, you are given a statement that shows the amount you must pay and the deadline. This statement would show any payments that you have made since your last statement (including those after the previous due-by date). Therefore it's reasonable to assume that the minimum amount already allows for those payments.

Furthermore, 2.1 holds that the minimum payment is calculated by reference to the statement balance (the 1% thing). Given this balance already includes the payments received, it would be strange if those payments could count towards the minimum on THIS statement when the minimum demanded is already less because of those payments.

Now consider your interpretation. People would get a statement showing payments received since the previous statement and a minimum due. But the "real" minimum could be less - because they could adjust it down for payments made after the previous due-by date.

Which interpretation do you think is more likely?

You see, all payments (as well as other transactions) "count for" the next statement. A statement gives you the balance as at that date - further transactions appearing on the next statement. The statement tells you what you must pay and by when and it takes into account previous activity. That minimum is what you have agreed to pay in the T+Cs.

So, I think they are correct in their interpretation. You were late because you didn't pay the minimum demanded after the date on which they demanded it.