NatWest scam - interest free period not what it seems.

cracklefish

I'm not sure if this is common to all card issuers but I have just discovered that if you pay your NatWest credit card in full each month by direct debit, the payment is taken 10 days before the due date. So your interest free period is reduced by almost 20%, more when you take into account that the banks claim their computers don't work at weekends!

It is interesting to note that if your direct debit is for the minimum then it is taken on the due date. No doubt, this is because the APR would be effected and the FCA would call foul.

Why is no agency protecting the interest of customers? We were sold cards with the benefit of the interest period. When they discovered that they could make shed loads of profit by charging us penalties for late payment and writing us a letter, they placated us with direct debit settlement only to find we are being screwed because we are obeying the rules.

There is no possible justification for this.

How do we stop the "helpful bank" helping itself to our money?

jimjames

cracklefish wrote: »

How do we stop the "helpful bank" helping itself to our money?

Move to another bank?

I've got quite a few cards and none have this happen so get switching asap.

nidO

This is not a scam, or unique to Natwest. Many card providers take automatic direct debits 7-14 days before the payment due date, presumably so that if their attempt to take payment fails for any reason (ie no money in your bank), they have time to retry the direct debit or for you to make payment by some other means without you incurring a late payment penalty.

meer53

cracklefish wrote: »

I'm not sure if this is common to all card issuers but I have just discovered that if you pay your NatWest credit card in full each month by direct debit, the payment is taken 10 days before the due date. So your interest free period is reduced by almost 20%, more when you take into account that the banks claim their computers don't work at weekends!

It is interesting to note that if your direct debit is for the minimum then it is taken on the due date. No doubt, this is because the APR would be effected and the FCA would call foul.

Why is no agency protecting the interest of customers? We were sold cards with the benefit of the interest period. When they discovered that they could make shed loads of profit by charging us penalties for late payment and writing us a letter, they placated us with direct debit settlement only to find we are being screwed because we are obeying the rules.

There is no possible justification for this.

How do we stop the "helpful bank" helping itself to our money?

Surely payments, whether in full or minimum, are all taken on the due date ?

What do you mean by "10 days before" ?

nidO

meer53 wrote: »

Surely payments, whether in full or minimum, are all taken on the due date ?

What do you mean by "10 days before" ?

Many card providers take automatic direct debit payments a few days before the statement's payment due date rather than on the due date itself.

For example, with one of my Natwest cards, the statement is generated on or around the 26th of the month and typically has a payment due date of the 21st ish of the following month, however the direct debit for the full statement balance is taken on the 11th of the month.

SuperHan

It's an example of not being able to please all of the people all of the time.

If they took the payment on the due date, then it bounced for whatever reason and was only taken the day after, somebody would be on here complaining that they had a late payment marker and fee even though they had a direct debit set up.

A bit of redundancy is always wise.

Plus, 10 days additional credit, assuming you have a 6% interest rate on your money which is the highest I'm aware is available, on a £1,000 balance that equates to £1.30 assuming a basic rate tax payer. For me, worth it to avoid the late fee of c. £15 if it fails on attempt 1.

Milarky

SuperHan wrote: »

It's an example of not being able to please all of the people all of the time.

If they took the payment on the due date, then it bounced for whatever reason and was only taken the day after, somebody would be on here complaining..

Whether they do or don't the due date is still a date which most customers will meet and is the contractually allowed date for all payments. So why (if not for the customers convenience?) would the bank try this on?

A bit of redundancy is always wise.

Plus, 10 days additional credit, assuming you have a 6% interest rate on your money which is the highest I'm aware is available, on a £1,000 balance that equates to £1.30 assuming a basic rate tax payer. For me, worth it to avoid the late fee of c. £15 if it fails on attempt 1.

Your point is precisely the point. See the movie Office Space. If the bank didn't think that pursuing your £1.30 here or 50p there was not useful to them it would not 'waste' its time running terms and condition variations like these. But £1.30 by 10s of thousands each month is a tidy sum you see.

See the term Shrinkflation also: when times get tight organisations hunt around for 'non-price' price increases. This is a sign that times are tight for the banks.

fozmcfc

It is a long time in front IMO, but then, people aren't forced to pay by DD, pay it manually if not happy.

For years, I paid mine manually, it's not difficult to pay it manually via Natwest online banking or their excellent app.

Failing that, numerous credit card providers out there, so switch.

SuperHan

Milarky wrote: »

Whether they do or don't the due date is still a date which most customers will meet and is the contractually allowed date for all payments. So why (if not for the customers convenience?) would the bank try this on?

I don't understand your point here. If they take the payment ON the due date, and the payment fails for admin reasons, you CANNOT make the payment on time. If you want to pay on the due date, don't pay by direct debit.

Your point is precisely the point. See the movie Office Space. If the bank didn't think that pursuing your £1.30 here or 50p there was not useful to them it would not 'waste' its time running terms and condition variations like these. But £1.30 by 10s of thousands each month is a tidy sum you see.

See the term Shrinkflation also: when times get tight organisations hunt around for 'non-price' price increases. This is a sign that times are tight for the banks.

Oh, I get this. The £1.30s are worth it to the bank (although my credit card and savings are with different people, but I appreciate as a 'cartel' of banks, they generally profit). However, for me, the £1.30 is worth the expense to me. I had an issue with online banking once so that I couldn't log on to transfer the money from my savings generating interest to the current account where the credit card DD was paid from. The first DD bounced, but was taken on the second day. Nil impact to my credit rating as I had paid on time. If they had taken it for the first time on the due date, I would have missed the payment date.

I prefer it the way it is. If they changed it I would be unhappy. Ergo, can't please all of the people all of the time.

meer53

nidO wrote: »

Many card providers take automatic direct debit payments a few days before the statement's payment due date rather than on the due date itself.

For example, with one of my Natwest cards, the statement is generated on or around the 26th of the month and typically has a payment due date of the 21st ish of the following month, however the direct debit for the full statement balance is taken on the 11th of the month.

Strange. I get my statements and it says "due date xxxx" the payment is always taken on this date unless it falls on a non working day.

zagfles

Amex do this as well.