Lloyds Credit Card Letter RE: Changing the way they calculate interest...

socks_uk

I've had a letter through the post (looks genuine) from Lloyds about my Lloyds Avios Duo credit card. It says...

"The way we calculate your minimum payment is changing.

From your March 2015 statement onwards the way we work out the minimum payment on your account will be changing.

The new calculation will bring you in line with the current industry standard, making it easier for you to compare credit card options in the future. So, your minimum payment will be worked out using whichever is the highest of these two options:

Balance in full if your balance is £5 or less or,
1% of your balance + interest + default fees."

At the moment my minimum payments are around £118 but I have a payment set up for £130 to come out of my bank account to pay my monthly fee which, in turn, cancels the direct debit from paying the minimum payment. BUT, my NEW minimum payment in March is quoted as being £148.90. So much for me trying to pay more than my monthly fee to help try to pay it off!

For as much as I would love to clear my debt (£5746) by overpaying each month or having a 'low % life of balance transfer', my husband is paying off his debts with help from Step Change and I am aware that his debts will reflect on my own credit rating so am doubting I would be accepted for a balance transfer.

I suppose I came here today to, firstly, see if anyone else had mentioned receiving the letter from Lloyds (or any other banking group saying the same thing) and is it genuine but secondly to see if anyone can help me understand it as I'm not sure I can.

Hope someone can help, I thought I was starting to get on top of things.

Dobbibill

You have several statements to get through before March so this is probably an example/estimate but I doubt it is your guaranteed minimum payment as they don't know what you will pay by then and so what you balance will be.

I have a CC with them too but haven't received this letter YET, will let you know if I do. If you doubt that it is genuine then I would give the number on the back of your card a ring and have a quick chat with them.

DB

YorkshireBoy

Dobbibill wrote: »

You have several statements to get through before March so this is probably an example/estimate but I doubt it is your guaranteed minimum payment as they don't know what you will pay by then and so what you balance will be.

Bearing in mind the OP is only paying £12 a month more than the minimum, it'll be a fairly accurate estimate though. After all, and assuming they're no longer using the card, the OP is making very little impact paying 2% when there's over 1.5% in interest being applied each month at the moment.

I have a CC with them too but haven't received this letter YET

Yours must be an old account too then, if you're still on the old 2% minimums?

YorkshireBoy

socks_uk wrote: »

...my husband is paying off his debts with help from Step Change and I am aware that his debts will reflect on my own credit rating...

Only if you're financially associated (by joint products such as a current account, mortgage, loan, etc). Are you?

socks_uk

Dobbibill wrote: »

I have a CC with them too but haven't received this letter YET, will let you know if I do. If you doubt that it is genuine then I would give the number on the back of your card a ring and have a quick chat with them.

DB

Thanks for the reply... It looks very genuine (it knows my credit card balance) so I suppose I only started to doubt it when I came to MSE to see what other people were saying about it but couldn't find anything.

After finding out about all my husband's debt he'd been hiding (£32,000 :eek: ) and finding myself paying for all the grocery shopping and our 'treats' (meal out at the pub once a month on payday!) I just want to clear my debts. I can't see how this letter will help me.

socks_uk

YorkshireBoy wrote: »

Only if you're financially associated (by joint products such as a current account, mortgage, loan, etc). Are you?

Yes, we have a mortgage and an empty savings account.

YorkshireBoy

socks_uk wrote: »

I just want to clear my debts. I can't see how this letter will help me.

The new payment calculation means your debts will be repaid sooner. That's where the industry is coming from with the letter. I appreciate that's little consolation when, presumably as a couple(?), you're also having to sort out the other £32K mess!

On the upside, the pub lunches must be nudging £18 a month so you won't be defaulting anytime soon?

stator

If you let them know that you won't be able to afford the new minimum payment they might agree to freeze the interest and come up with a plan to pay it off gradually.But if they think you can afford the new minimum they probably won't agree.

socks_uk

YorkshireBoy wrote: »

On the upside, the pub lunches must be nudging £18 a month so you won't be defaulting anytime soon?

Just over a tenna for both of us to have a carvery and lime juice & soda water at a Crown Carvery, but I appreciate your help.

If only I could see that a pay rise was on the cards in the next year or two!

YorkshireBoy

stator wrote: »

If you let them know that you won't be able to afford the new minimum payment they might agree to freeze the interest and come up with a plan to pay it off gradually.But if they think you can afford the new minimum they probably won't agree.

By that, do you mean stop charging it or keep the current rate where it is?


OP has the right to opt-out of any interest rate increase, on condition they stop using the card. But I'm guessing because they're wanting to clear their debts they're not using the card anymore anyway?

socks_uk

YorkshireBoy wrote: »

By that, do you mean stop charging it or keep the current rate where it is?


OP has the right to opt-out of any interest rate increase, on condition they stop using the card. But I'm guessing because they're wanting to clear their debts they're not using the card anymore anyway?

No, I'm not using the card and the credit limit on it is £5900 so I'm within its limits. I haven't ever cut it up 'just in case' but maybe today's the day!