Making a minimum payment only

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Hello all,

I am sorry if this is a stupid question but I am not good with credit ratings and credit cards and things. I have a Vanquis credit card. I have had it for 2 months now. The first month I paid the balance off in full. This month I have had a lot to pay out for and I owe £55 on it. The minimum payment was £5 which I have paid. I am wondering is it going to look bad if I only make the minimum payment this month and then clear it next?

Thank you in advance,
Andrew
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  • StuC75
    StuC75 Posts: 2,065 Forumite
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    Some credit cards do flag if only the minimum payment has been made.. What looks Good & Bad is open to personal views.. as long as you are meeting the contractual obligations then it cannot be a bad thing..

    One alternative is to pay 1p over the minimum amount, that way the minimum payment flag wouldn't show since you technically paid over the minimum, but under the balance..

    What you do need to consider though is that you would pay interest on that balance - plus any further purchases this month WOULD NOT be interest free since it only applies after consecutive months of paying the balance in full..
  • opinions4u
    opinions4u Posts: 19,411 Forumite
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    Send them an extra £1.

    Minor impact in the great scheme of things, but beneficial nonetheless.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    Combo Breaker First Post
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    Hello all,

    I am sorry if this is a stupid question but I am not good with credit ratings and credit cards and things. I have a Vanquis credit card. I have had it for 2 months now. The first month I paid the balance off in full. This month I have had a lot to pay out for and I owe £55 on it. The minimum payment was £5 which I have paid. I am wondering is it going to look bad if I only make the minimum payment this month and then clear it next?

    Thank you in advance,
    Andrew
    Paying the minimum does not look good...but opening the account only 2 months ago will have a worse effect on your credit rating.

    If you are not good with credit cards then do not use them. The ideal thing to have done is to pay it in full even though it would have left you short. You would have as you said found yourself short so use it again to buy something essential if required. It would have remained interest free and cost you nothing. You must then reduce your spending and try not to use it again.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • iancrt
    iancrt Posts: 133 Forumite
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    I wouldn't worry too much. it'll cost you a couple quid in interest but thats fair enough for some financial flexibility. The interest is nothing compared to missing payments on something else. If you can afford to pay it off next month do, if you cant - pay off whatever you have spent next month plus as much as you can of the £55 without making you stretch anything else.
    However if you spend £55 on it next month and find you can't payback £70 or more its time to cut it up. If you think 'its OK I'll probably be able to pay it next month' two months in a row something is wrong with your cash flow
    CHALLENGES MAR'14:
    CHALLENGES 2014: £1-a-day#43 £84/£365; £3350k BY MAY
    £2700/£3350; £1500 BY JULY £0/£1000
    EMERGENCY FUND £0/£2500; 2014 MFW #61 £0/£2500; CC £290/£2270
    2014 SUMMARY (POAYD 2014 #120 £3074/£12485 24.6%
    101 MONTHS... MORT: [STRIKE]£63,000[/STRIKE]
    £66850 | LOANS: [STRIKE]£26,000[/STRIKE] £0 | CARDS: [STRIKE]£33,000[/STRIKE] £1980

  • BrookesAndrew
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    The payment due date is not until the 28th September which is when I get paid. I will see how things go and I will do my up most to pay it off in full. I will pay a bit more of it now so the minimum payment flag won't come up.
  • greatgimpo
    greatgimpo Posts: 1,256 Forumite
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    The payment due date is not until the 28th September which is when I get paid.
    Better move fast then, cos that was 11 days ago.
  • adindas
    adindas Posts: 6,823 Forumite
    First Anniversary Name Dropper First Post
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    StuC75 wrote: »

    One alternative is to pay 1p over the minimum amount, that way the minimum payment flag wouldn't show since you technically paid over the minimum, but under the balance..
    .

    Is there anyway to do that if your monthly balance is less than minimum amount. e.g less than £5 ? sending additional payment using FPO will make people in credit, another problem ...
  • StuC75
    StuC75 Posts: 2,065 Forumite
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    Think you are confusing yourself there Adindas...

    The monthly statement balance would never be less than the minimum payment.. The minimum payment is usually a X% or £Y, which ever is the higher amount or balance if that is lower than those - statements will explain how that is done...

    Because a FPO is a manual payment then it requires common sense on the part of the person making the payment to make a judgement on what they are paying, and to know what is required..

    Credit card companies do not worry about slight overpayment \ credit balances.


    adindas wrote: »
    Is there anyway to do that if your monthly balance is less than minimum amount. e.g less than £5 ? sending additional payment using FPO will make people in credit, another problem ...
  • BrookesAndrew
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    I mean the payment due date is 28th October 2013!
  • adindas
    adindas Posts: 6,823 Forumite
    First Anniversary Name Dropper First Post
    edited 9 October 2013 at 1:52PM
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    StuC75 wrote: »
    Think you are confusing yourself there Adindas...

    Do not know
    StuC75 wrote: »
    The monthly statement balance would never be less than the minimum payment.. The minimum payment is usually a X% or £Y, which ever is the higher amount or balance if that is lower than those - statements will explain how that is done...


    Say the balance is £2.00 (or it is even could be just a few pennies spent each month) and T&C requires minimum payment of 1% or £5. Pay by DD (even for full balance) £2.00 will be taken (not £5 because your balance is just £2.00 ) + Top up manual FPO 1p = £2.01.

    Since £2.01 is less than £5 some computer program used by the bank is still confusing it with £5 minimum payment therefore flag it as minimum payment. And you will get a nice letter "we notice you are only doing minimum payment, If you only make the minimum payment, it will take longer and cost more to clear your balance.

    This is real case I have been experiencing.
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