NatWest scam - interest free period not what it seems.

chattychappy

DDs are meant to make life easier, but they just replace one problem (remembering to pay) with another (a new layer of complexity).

I pay manually - I suggest you do the same. I have yet to forget, but if I do I don't mind coughing up £12 (often refunded for a first offence) and I'm sure my record can cope with a single late payment. When DDs go wrong, you can also end up with charges/markers. You pays your money and you takes your choice.

SnowTiger

I think some posters have failed to understand the point made by the OP.

Natwest takes full payments by Direct Debit about two weeks before the statement due date, thus reducing the (up to 56 days) interest free period on purchases.

As an example: when I pay my Natwest balance in full by Direct Debit the payment is taken on the 11th of the month. However, if I choose to pay the minimum it's taken on the 23rd.

This seems fairly unique to Natwest. All the other credit cards I use take Direct Debit payments on the same date, regardless of whether I pay in full, the minimum or a fixed amount.

OP: I think they've changed this. I haven't used my Natwest card for a long time and had it set to pay the minimum because of issue you highlight. I've just amended the DD online to pay in full and note that I can select a payment date, including "Due Date". This appears to be the date the amount is due, rather than a date twelve days prior.

SnowTiger

chattychappy wrote: »

DDs are meant to make life easier, but they just replace one problem (remembering to pay) with another (a new layer of complexity).

I pay manually - I suggest you do the same. I have yet to forget, but if I do I don't mind coughing up £12 (often refunded for a first offence) and I'm sure my record can cope with a single late payment. When DDs go wrong, you can also end up with charges/markers. You pays your money and you takes your choice.

Don't get too excited. This isn't a case of a DD doing wrong. It's just the way Natwest does things. And, to be fair to them, the DD payment date is mentioned on the statement.

I suspect someone who doesn't read their credit card statement would be unlikely to make a manual payment (on time), so DD isn't the issue.

If a DD goes wrong there's the DD Guarantee to fall back on. If the customer goes wrong (:rotfl: forgets to pay) there's missed payment charges and black marks on their credit report.

katejo

I simply never use DD payments on my cards. I prefer to do it manually. The statement appears around the 21st and I am paid 1 week later. I clear it in full as soon as I have been paid. Have never forgotten yet.

chattychappy

SnowTiger wrote: »

If a DD goes wrong there's the DD Guarantee to fall back on. If the customer goes wrong (:rotfl: forgets to pay) there's missed payment charges and black marks on their credit report.

Yep - and if you forget your DD is going out you can get DOUBLE charges.

The devil is in the detail of "DD goes wrong". You are still left to sort the mess out and any knock-on effects.

My idea of a DD guarantee is that because I never sign them, I'm guaranteed that I remain in control of my current account and have no fear of unwanted excitement!

SnowTiger

chattychappy wrote: »

Yep - and if you forget your DD is going out you can get DOUBLE charges.

If you don't have the money, you don't have the money.

If you forget a payment is due, you forget its due whether you pay manually or by Direct Debit.

chattychappy

SnowTiger wrote: »

If you don't have the money, you don't have the money.

If you forget a payment is due, you forget its due whether you pay manually or by Direct Debit.

Well, I agree with that. So why risk double charges? Plus the hassle factor that if a DD does go wrong, you have to enforce the "guarantee"....

SnowTiger

chattychappy wrote: »

Well, I agree with that. So why risk double charges? Plus the hassle factor that if a DD does go wrong, you have to enforce the "guarantee"....

No risk really. With current accounts now paying pretty good interest, I hold enough money in my account to cover DDs.

There isn't much hassle when a DD goes wrong. An email or phone call to the bank is enough to get an immediate refund.

chattychappy

SnowTiger wrote: »

There isn't much hassle when a DD goes wrong. An email or phone call to the bank is enough to get an immediate refund.

But that's not enough if in the meantime other transactions have been bounced. Case in point: whilst I was overseas, £6800 of fraudulent activity went through an otherwise dormant account. It was 6 weeks before I realised and eventually the charges/interest were reversed. If I had signed a DD, this would have pretty much cleared my account out. It is debatable whether the DD guarantee would have helped - the amount taken would have been correct according to the balance shown and the CC required me to sign a form confirming the transactions were fraudulent before correcting the account - something I couldn't do whilst away. But in any case, between the time of DD being taken and the funds being returned to my current account, other transactions would have bounced. As it was, not having a DD acted as a fire break protecting my current account and preventing any knock-on effects.

redpete

Chattychappy: I am well organised and never forget to manually pay my credit card payments - so I wouldn't get any benefit from DDs and avoid any problems with them.

Other people: I am not as organised as Chattychappy and would sometimes forget to pay manually on time and/or in full but I do always have enough money in the account to cover the payments; setting up DDs avoids paying charges for missing a payment and do not cause me any other problems.

Still other people: I am not organised enough to keep enough money in my account to cover CC payments.

For Chattychappy DDs would not give any benefits and avoids the small risk of the DD going wrong. For other (most?) people the benefits of DDs outweigh the risks.

There is no single answer to "Are DDs a good way of paying CC bills?" but I suggest that more people would benefit from them than otherwise.