natwest credit card - fixed amount by D/D

psychic_teabag

I have a 0%-purchases credit card from natwest, so I've been letting the balance build up. I did have a D/D set up to pay the min, but then heard that paying only the min can impact credit score, so I changed it to be a fixed amount (£50, comfortably above the minimum of around £35), which was one of the 3 options available via the online interface (the other two being minimum and full balance).

However, the payment wasn't taken. Fortunately, I also pay the min manually by debit card, to avoid exactly this sort of cockup. I phoned to enquire, and was told that a fixed-amount Direct Debit wasn't done by them, and they seemed to think I should contact my bank to find out why they hadn't sent the money. Which caught me completely off guard : I had assumed that it was simply a D/D in which case the amount they'd ask my bank for would be £50, rather than the min (1% of balance, and so around £35 or so). Surely if my bank was supposed to be sending the money, it would just be a standing order setup there. (The natwest interface did say that the fixed payment would be adjusted if it was smaller than the minimum, or larger than the outstanding balance, so it obviously has to be a pull from them, rather than a push from the bank.)

Rather than spend a long time arguing, I just got them to set the D/D back to the minimum amount Anyone else come across anything like this ?

jonesMUFCforever

Could it be that you did not leave enough time for the current statement to be collected by the new D/D figure?
Next month it might have been ok.
Personally I would leave the minimum D/D in place and if you want to pay extra through internet banking.

Paying only the minimum on one credit card is not going to adversly affect your credit score that much.

psychic_teabag

I'm pretty sure I changed it in plenty of time. And since it was a change from min to £50, they ought to have taken one amount or the other, rather than nothing. (Well, that's staying with my assumption that it was just the amount of the D/D that was changing - customer services seemed to be describing that a fixed-amount D/D was a completely different beast from a min-payment D/D.)

There was one other oddity, actually : when I came to make the manual payment, it was claiming that the minimum was £50, whereas it should have been around £35 (1% of the balance).

I've just rechecked that statement - it stated that my nominated bank account will be debited with a payment of £50 on ... And it also said that the minimum payment was £50.

I wonder if the fixed-amount D/D was just implemented by internally setting the minimum payment amount on the account to £50 or 1%, whichever is the larger, rather than the usual £5. That would be a straightforward way to implement it, and seems to fit the facts. But they just forgot to actually collect it.

YorkshireBoy

psychic_teabag wrote: »

I'm pretty sure I changed it in plenty of time.

Did you change it after the statement (that wasn't paid/collected by DD) was produced? If so they'll have cancelled the old one but not set up the new one for collection until the next statement is generated (this will be verified by the absence of a £12 'returned DD default fee').

This is because they need to notify you of the amount and date in writing (under the DD guarantee), and the only mechanism they have for this is the statement.

I'm a big believer in DDs, but I'm an even bigger believer in leaving them well alone once set up...for the very reasons you've experienced.

psychic_teabag

No, I don't think so. The statement for which no payment was taken confirmed that the updated amount (£50) would be taken on the payment date. But it just didn't go.

They shouldn't have needed to cancel the D/D mandate and set up a new one, since it was a variable amount anyway, but I can accept that they have to tell me in advance what the amount will be, via the statement. (As they did.) But it should have been an atomic change - either they take the previously-agreed amount, or the new amount.

My notes suggest I made the change between 7th and 18th Dec, and statement was on the 24th. (I don't have the exact date I made the change, but I record such things in a text file, and the version saved from the 18th has the updated amount.)

YorkshireBoy

So you normally/used to pay two minimum payments a month then?...one by debit card and one is taken by direct debit? £35 each? Sorry if I've misunderstood, but that's how your post reads to me.

If that's the case there was no need to make any changes (in order to cover the 'minimum payment marker' issue.

However, maybe that's not what you meant or I did read it wrong? In which case I wonder if it's simply a timing issue?...ie this latest debit card payment was made a bit earlier in the month (more than 5 working days or so before DD collection date) and there was then time for NatWest to cancel the DD (coincidentally for £50 fixed, rather than an expected £35 minimum) for this month?

SnowTiger

psychic_teabag wrote: »

However, the payment wasn't taken. Fortunately, I also pay the min manually by debit card, to avoid exactly this sort of cockup. I phoned to enquire, and was told that a fixed-amount Direct Debit wasn't done by them, and they seemed to think I should contact my bank to find out why they hadn't sent the money.

Does Natwest offer fixed DD payment as an option? It's quite rare, but some credit card companies do. Do you see it as an option on your account now? Whenever I set such things up I always take a screen grab for my records.

It can take a few days for a DD instruction to go through the system - although it's usually very quick. And it can take over a month for it to be fully utilised because the payee has to give the payer notice of when a DD payment will be taken and how much it will be for.

What does it say on your credit card statement about that?

psychic_teabag wrote: »

Rather than spend a long time arguing, I just got them to set the D/D back to the minimum amount Anyone else come across anything like this ?

As others have suggested, the easiest way to achieve what you want is to leave the DD for the minimum amount in place and pay extra. You could set up a standing order to pay an extra £1, or whatever, every month.

psychic_teabag

SnowTiger wrote: »

Does Natwest offer fixed DD payment as an option? It's quite rare, but some credit card companies do. Do you see it as an option on your account now?

Yes, the option is still there :

Fixed Direct Debits
You are now able to set up a Fixed Direct Debit. If your minimum payment for any given month exceeds your fixed payment we'll adjust it accordingly. If your fixed payment is higher than the balance we'll reduce it to avoid your account going into credit.
If you require assistance please contact the technical helpdesk using the ‘Contact us’ link.

and if I go to ammend the D/D, it offers me minimum, full, or fixed (with a box for the amount).

I have been making additional manual payments - ironically, it's because the D/D is from a Santander 123 account, and I'd been assuming Santander would screw it up sooner or later. But NatWest seem to have got there first !

Anyway, I'll carry on with the additional payments in addition to the minimum D/D. I was just hoping someone could cast some light on how a "fixed direct debit" could be anything other than a direct debit where the amount debited is fixed. Customer services seemed quite adamant that a "fixed direct debit" was something else, and my bank was supposed to have sent the money (which to me just sounds like a standing order).

izoomzoom

Haven't read all the replies, but I pay all my cc by weekly SO. I did have DDs set up but I think all but Barclaycard have fallen by the wayside.

As Barclaycard is my lowest interest I tend to stick with the minimum payment, which is average monthly fee divided by 4. Occassionally the statement period seems to be very close on 28 days (but only 3 SO amounts been credited) and in these cases Barclaycard tend to take a DD for the different between the minimum payment amount and the SOs that have already been credited. The 4th SO amount seems to still hit the account, including being shown on the monthly statement.

HSBC and PO DD's seem to have fallen by the wayside, but I pay well over the minimum payment amount, so hasn't been a factor.

Thing I like about SO is I know exactly what day amount goes out. DDs often vary by a few days each month and as my money comes in drip drip through the month, this works for me.