Barclaycard - min payment doesn't include interest added the day after!

RickieFlack

I've just found out that my wife's Barclaycard states a min payment (fine okay) but if you pay that and your very close to your limit the next interest is added the day after the payment date which can (and has done with her) take you over the limit adding an extra charge automatically.
She couldn't understand this and I had a look and the statements are the same. The day after the payment date the interest is added, surely this should be included in the minimum payment to prevent people going over rather than be organised to catch you out.
This has been happening for a few months and she hadn't said anything, no wonder it can make you feel stupid that you keep getting extra charges when you pay what Barclaycard say you must at least.
Surely this has to be a dodgy practise at the very least!
We're scraping by, but this is not helping on a low income, and the card is for emergencies really (okay hands up it obviously hasn't been used like that, or rather emergencies are more frequent on our income) and the limit is only £400, but to add interest the day after the payment date that is not calculated in the min payment is surely wrong as anyone on DD will fall for the charges due to Barclaycard using this underhand method.

Any advice, or pointers on this one as I really think it's a 'loan shark' approach, catching you with more charges and interest than you should be getting hit with, and I can't believe they can be getting away with this.

PDF

Pay the card manually before the DD is due but after the statement has been produced. This should help.. for info with Barclaycard if you make a manual payment for more than the min payment , after the statement date they will not take the DD as well. (Some Cc companies still take the DD)

SnowTiger

RickieFlack wrote: »

I've just found out that my wife's Barclaycard states a min payment (fine okay) but if you pay that and your very close to your limit the next interest is added the day after the payment date which can (and has done with her) take you over the limit adding an extra charge automatically.
She couldn't understand this and I had a look and the statements are the same. The day after the payment date the interest is added, surely this should be included in the minimum payment to prevent people going over rather than be organised to catch you out.
This has been happening for a few months and she hadn't said anything, no wonder it can make you feel stupid that you keep getting extra charges when you pay what Barclaycard say you must at least.
Surely this has to be a dodgy practise at the very least!
We're scraping by, but this is not helping on a low income, and the card is for emergencies really (okay hands up it obviously hasn't been used like that, or rather emergencies are more frequent on our income) and the limit is only £400, but to add interest the day after the payment date that is not calculated in the min payment is surely wrong as anyone on DD will fall for the charges due to Barclaycard using this underhand method.

Any advice, or pointers on this one as I really think it's a 'loan shark' approach, catching you with more charges and interest than you should be getting hit with, and I can't believe they can be getting away with this.

The interest is for the previous month from the last statement. The interest your wife pays as part of the her payment is for the month previous to that.

How is Barclaycard suppose to know how much interest your wife should pay until the statement period ends and interest is applied to the account?

Interest is charged daily and added monthly. Spending and additional payments will affect how much interest is charged.

Spending up to the limit isn't very wise. And Barclaycard do provide a guestimate of how much interest they will charge.

This is how all credit cards work.

Advice: stop using the card and pay off the balance as quickly as possible. If you can't do that, leave about 10% breathing space and don't spend up to the limit.

RickieFlack

Thanks PDF, that actually does help in one way (thanks given), they should actually advertise that as a plus for them.

SnowTiger, the point is it's not clear that the day it is added is the day after the payment is taken, so making nonsense of the min payment if they were responsible lenders to prevent going over... Possibly you don't understand or I haven't explained it clearly.

Adding a charge the day directly after payment that is not taken into account on the advised minimum payment (not on the statement production date) is surely a way to continue debt with the addition of unexpected charges.

We do try and manage what we have and try our best to pay our debts rather than avoid them. Unfortunately the maths is my field rather than my wife's (not what I married her for) so she didn't notice this particular issue.

Now we know, we can try and compensate, but I do still think it's an underhand practise to get an estimate not including 'the day after' (still don't know why this is out of sync) which incurs a charge (immediately) which will only serve to make things worse.

SnowTiger You quoted the post but I really don't think you read it...

Has anyone else came across this and any ideas on it?

SnowTiger

RickieFlack wrote: »

SnowTiger You quoted the post but I really don't think you read it...

Has anyone else came across this and any ideas on it?

I read it.

You don't understand how interest is charged.

The interest that appears on your wife's statement isn't for the coming month, it's for the previous month.

This can only be calculated after all transactions for that period (credits and debits) have been applied to the account. That's why the interest for the previous month appears on the statement after the Direct Debit.

The statement contains an estimate of what next month's interest will be. Take that in to consideration, but remember it is only an estimate.

I don't know what magical advice you're looking for. Your initial posting contained "dodgy practise", "surely wrong", "underhand method" and "'loan shark' approach".

What are you looking for here? To claim a bit of compo from the big bad bank?

The advice is simple: don't use the card up to its limit. Be aware that interest for the previous month will be added when the statement period is closed off (after the Direct Debit).

That's how credit cards work. That's how all the ones I have work; I have lots!

I guess your wife is paying off about as much as she's spending every month. Probably less, taking charges and interest in to consideration. She really needs to get this under control. Remember that she pays for purchases from the day they're made unless the balance is paid off in full every month. Not forgetting trailing interest of course...

Transformers

It's always someone else who's to blame.

shortcrust

SnowTiger's right. The lender doesn't know how much you're going to spend in the month ahead so they can't possibly use minimum payments to ensure that accounts aren't taken over the limit by interest charges.

I'm so tired of people complaining about lenders not being responsible when it's actually their own borrowing that's irresponsible. You know that interest is going to be added to the account so just make sure that there's available credit to cover it. Why is that difficult?

leeroy2009

sorry buddy but it is you and your wife who are not managing your account correctly, no fault at all of Barclaycard and no underhand ness by them.


I have 2 cards with Barclaycard, and what they are charging you and the manner in which they charge you is correct, the interest you are paying is for the previous month, the statement quite clearly shows you the interest charged on your standard balance for the last month, as you are at or near your credit limit - the interest charged puts you over that credit limit and you correctly are charged another fee for going over your limit - a fee you agreed to when you took out the card.


this is financial mismanagement on you and your wife's behalf.


I also suspect it is harming your internal baraclaycard score etc as you appear to be going over your limit not just on a one off but a few times.


if you need breathing space, try and have your credit limit increased, they may say no due to the way you are managing your account, or maybe apply for a 0% bt card and shift the Barclaycard balance onto that - this will also help you out.

Luke

If you phone up Barclaycard you can choose to pay a set amount every month. Obviously this needs to be greater than the interest charged or you will be getting further into debt.

supermac9

SnowTiger wrote: »

How is Barclaycard suppose to know how much interest your wife should pay until the statement period ends and interest is applied to the account?

Interest is charged daily and added monthly. Spending and additional payments will affect how much interest is charged.

Spending up to the limit isn't very wise. And Barclaycard do provide a guestimate of how much interest they will charge.

This is how all credit cards work.

Advice: stop using the card and pay off the balance as quickly as possible. If you can't do that, leave about 10% breathing space and don't spend up to the limit.

Some good advice here, but the minimum payment set by Barclaycard will always exceed the amount of interest charged, which in turn should prevent account holders exceeding the credit limit. As long as you are within the credit limit at the time of payment, I can't see how the monthly interest charged (the day after) could possibly take you overlimit when the statement is produced (or am I missing something?).

A quick point to some of those who have replied - RickieFlack is looking for advice and guidance, not criticism, so go easy. Financial difficulties are hard enough to manage without statements such as "I'm so tired of people complaining about lenders not being responsible when it's actually their own borrowing that's irresponsible" (shortcrust) or "What are you looking for here? To claim a bit of compo from the big bad bank?" (SnowTiger).

shortcrust

supermac9 wrote: »

A quick point to some of those who have replied - RickieFlack is looking for advice and guidance, not criticism, so go easy. Financial difficulties are hard enough to manage without statements such as "I'm so tired of people complaining about lenders not being responsible when it's actually their own borrowing that's irresponsible" (shortcrust) or "What are you looking for here? To claim a bit of compo from the big bad bank?" (SnowTiger).

I think it's possible that people who mistakenly attribute their difficulties to 'dodgy practices' and 'loan shark approaches' might benefit from a little criticism in the long run.