Minimum Repayments Article Discussion

MSE_Martin

The following discussion relates to the Danger! Avoid Minimum Repayments article.

To ask a question or discuss it please click reply.

Milarky

With 'life of balance' cards, the advise varies somewhat. If the rate is particularly attractive [eg 3.9 or 2.9] then a percentage [eg 3% or 2%] of a reducing balance is fine surely? Extending the time to repay a 'cheap' debt is generally a 'good idea' whereas reducing the time to repay a 'dearer' debt is equally a 'good idea'...

If the rates were 4.9 or 5.9 or 6.9, say, then faster repayments would be recommended.

Note that Egg is one company that allows you to set the regular repayment at any level between 2% and the balance. This is a useful facet, and something all cards could offer their customers.

But if a minimum payment is made manually, and is missed or just late by a day a fee is payable. So the direct debit option is highly recommended in all cases. It's just a shame that some DDs are difficult to set up - and usually can't take a first month's payment.

So my 'wishlist' of features would include:

- cards should allow you to set a higher regular payment

- cards should allow for your first payment to be taken late if the DD is 'set up' in time by you but misses the bank's own deadline.

chowster

I must say I have always just paid the minimum amount, even when I could have afforded much more, will now try and pay into the card each month as well as paying the minimum. Thanks for the advice.. ;D

MSE_Martin

Thanks Chowster, that one post alone makes me glad I wrote the article

Nursey

I've detailed below a website that has various financial calculators on it but in particular one that calculates and shows you the difference between paying the minimum monthly credit card amount and if you payed a fixed monthly amount. It's a US site and the figures are in dollars but the end costs and savings are the same if you think of the figures in pounds. It certainly opened my eyes to the true cost of paying the minimum. Its also made calculating out where my credit card debt will be in several months from now a doddle as it shows you a monthly breakdown of your reducing balance (or not very slowly reducing balcance if you pay the minimum).

https://www.bankrate.com/brm/calc/MinPayment.asp

Lexism

So my 'wishlist' of features would include:

- cards should allow you to set a higher regular payment

I asked HSBC and LLoydsTSB for bank details, so I could set up standing orders to my cards, and they provided it. This way, I have always paid on time and more than the minimum, as well as having the option to change the levels I pay each month.

Has anyone tried to do this with other card providers? I am going to be looking for new card deals soon and was wondering if there was any reason for me to believe I couldn't do this elsewhere? ???

Martinslovechild

Has anyone tried to [set up standing orders] with other card providers?  I am going to be looking for new card deals soon and was wondering if there was any reason for me to believe I couldn't do this elsewhere? ???

I have done this for every card i've ever had without exception, even if it took a quick phone call to get the details from the credit card company.

smartsaver

I action my own repayments through internet banking - although this takes a lot of disipline. I do worry if I contract some awful disease and end up in hospital who will know what to pay who when ??? . I pay my cashback cards in full and my stoozing cards the minimum - until the 0% runs out... 8)

henty_2

Holders of Halifax one credit card BEWARE
I was charged £25 when my payment was received 1 day late - 30 Dec
My payment was made by Internet banking from my bank on 23 Dec
After two phone calls this has been reduced to £12.50

Any suggestions to get a full refund of this charge
I recommend boycotting Hailfax

smartsaver

Holders of Halifax one credit card BEWARE
I was charged £25 when my payment was received 1 day late - 30 Dec
My payment was made by Internet banking from my bank on 23 Dec
After two phone calls this has been reduced to £12.50

Any suggestions to get a full refund of this charge
I recommend boycotting Hailfax

I'd call them again. You will get a different someone different at the call centre who may be more sympathetic.

Walletwatch

Holders of Halifax one credit card BEWARE
I was charged £25 when my payment was received 1 day late - 30 Dec
My payment was made by Internet banking from my bank on 23 Dec
After two phone calls this has been reduced to £12.50

Any suggestions to get a full refund of this charge
I recommend boycotting Hailfax

Well, four of the intervening days were Banking holidays (25-28 Dec). Whom do you bank with, and how many working days do they say it takes for payments to clear? Also, what time of the day did you make your payment via Internet banking?

You knew beforehand, that there were four bank holidays in the intervening period, so if it normally takes four working days to effect a transfer, maybe you should have initiated it a couple of days earlier.