Barclaycard DD for minimum payment on and still gone overlimit without spending

gozmani

Hi,
Ever since I had the Barclaycard, I had the direct debit set up for minimum payment. Back in 2008 was the last time I used the credit card leaving a balance of £1000 to get paid off by minimum payment (bad mistake I know) but this is not the issue. In December 2012 they sent me a letter to say I went over the limit which is £1150. I have never used the card all this time. How could that have happen? The PPI was still going out monthly but that was only about £8 and surely that would have been taken into account by Barclaycard when calculating the minimum payment so the balance should still have gone down (by a small amount) and not up...
Any help here?
Thanks!

danthemoneysavingman

and you've phoned barclaycard about this first of course?

gozmani

I phoned Barclaycard and stopped the PPI and made a claim for it. They offered me £558 which is the amount I paid over the years. I didn't accept that offer as I think the implications are far greater than just what I paid them. I am getting paperwork together to go to the Ombudsman next.

chattychappy

have you looked at your statements to see what happened? credit limit change? other fees/charges?

MrSilk

interest charges outweighing the minimum payment by any chance?

shortcrust

gozmani wrote: »

I phoned Barclaycard and stopped the PPI and made a claim for it. They offered me £558 which is the amount I paid over the years. I didn't accept that offer as I think the implications are far greater than just what I paid them. I am getting paperwork together to go to the Ombudsman next.

Eh? They've offered to give you all you money back and you've said no? What more are you hoping for?

EDIT: As for going over the limit, £5 min payment and £8 a month PPI would fit with the dates.

Cycrow

PPI is often handled by a separate third party and is just added onto the account like any other purchases, so technically, you were still spending on the the card, £8/month

the minimum payment is usually interest + % of total balance, it doesn't take into account any spending or anything else thats put on the card.

if the % was 0.5% (not sure if it is, but sounds about right) then that is £5 on top of interest (assuming £1000 balance) So you were paying of £5 and putting on £8, so your balance would be increasing £3 a month.

Over the 4+ years, that would had added up to the £150 that took you over the limit

gozmani

the minimum payment wasn't £5, this is the minimum you can pay if the % is smaller. The direct debits were all between £25-£27/month

StuC75

What were the statements showing each month,, this would show where the increasing balance came in..

Cycrow

the £5 is on top of interest, so its interest + £5

this is just an assumption, i don't know the actual figures

£5 is 0.5% of £1000 (the balance you say you had)
so if the minimum payment was interest + 0.5%, then it would be interest + £5
therefore clearing of £5 of the balance each month

opinions4u

Shouting:

LOOK AT YOUR STATEMENTS.

THE ANSWER IS ON THEM.