MSE News: Beware the credit card overpayment that isn't an overpayment

Consumerist

Willing2Learn wrote: »

The only reason I have the DD is for when I'm in hospital as I have constant fluctuating health problems and this prevents any risk of late payments or default whilst out of action having hospital treatment.

Why not set up the DD to repay in full?

chazzee

With Cap1, If you pay in full then the DD won't be taken (unless it's too close to the DD date). If you don't pay in full, then it will - regardless of the extra amount you pay (up to the total balance). That's the way I believe it works.

Willing2Learn

Consumerist wrote: »

Why not set up the DD to repay in full?

'Cos once I was out of commission for six months and that amount of time paying all the bills and maintaining payments could cause problems if there is no income or reduced income getting paid into current account. As long as payments on my home and priority bills are paid in full everything else is set up as minimum payments. I ordinarily make payments by Faster Payments or S/O on all low priority bill/contracts/agreements (including cc) to keep the amount of credit used between 10-30% of available credit.

chazzee wrote: »

With Cap1, If you pay in full then the DD won't be taken (unless it's too close to the DD date). If you don't pay in full, then it will - regardless of the extra amount you pay (up to the total balance). That's the way I believe it works.

Cool, thanks for info.

zagfles

Consumerist wrote: »

That's fine if you don't intend to pay off the entire balance every month (i.e. so that you don't pay any interest charges).

If you're paying the entire balance every month why not change the DD to collect the entire balance every month?

chattychappy

Consumerist wrote: »

A lot of posts for a non-story.

Thanks for bumping again, though. :T

DJ_Mike wrote: »

Such a non-story

I was missold this thread, thinking it was a story. Can I have my compensation now please?

izoomzoom

Something that I discovered by having regularly 'over' payments alongside a DD is that the DD can fall off the grid if it hasn't been used for a 12 month period.

Don't know if it still the case now, but I got stung one month when I assumed :mad:

Gordon_the_Moron

Consumerist wrote: »

The whole point of the original article is that some cards will collect the full amount of the direct debit even if you make an additional payment - and even if that means putting your account in credit.

Some work like this some reduce your direct debit because you've made an overpayment.

If you have one that collects the direct debit amount regardless just overpay what you can as and when you can.

If you have one that does reduce the amount of the direct debit by the amount of any overpayment, simply pay the minimum + the amount you want to overpay a week or more before the direct debit is due. You then pay the amount of the direct debit + what you want to overpay. The direct debit does not get collected.

mr_jrt

Willing2Learn wrote: »

From my experience, information in the article re Cap1 is incorrect.

Indeed, just seems to have been a weird combination of factors. I have mine set up to pay off the full balance up to a sensible cap. My mistake was thinking the cap would include any additional payments I made, when in fact it only considers the card balance.

Anyway, I spoke to CO and they somewhat generously gave me a goodwill gesture to cover the overdraft fees and explained how I can use the DD guarantee to reverse the DD they took. Popped into a branch of my bank and the guy filled in a form and I had the money back in 24 hours The DD guarantee is somewhat nifty and thanks to it I have no future qualms about using DDs.