Alliance & Leicester increase minimum payment

moneyuser

Thanks for this info. I was thinking of applying for this card but won't be bothering now.

bcl999

I got the same letter for my Virgin card today. I think it's run by MBNA so looks like they are doing it with all their cards.

Careful_ly

I have had a letter from Virgin today too, but the wording suggests a payment of £10 instead of the current £5

"1b The minimum payment that you must pay by the payment due date shown on your statement each month will be as follows:
if the balance shown on your statement is £10 or less, it will be the total amount of the statement balance : or
if the balance shown on your statement is more than £10, it will be whichever is the LEAST of 5% of the statement balance OR the total of any payment protection cover charges, interest, handling fees and default charges plus £5, provided that it will always be at least £10"

So if you are on a 0% offer then after your 1st payment which will be the balance transfer fee plus £5, then future payments will be £10 instead of the current £5 per month. The crucial words are LEAST and OR which are my capitals.
That is my understanding based on my previous MBNA payments.
Comments from other MBNA users appreciated :beer:

sicker

Well my next in payment due on my A&L card is £5 (£4900 balance) and I will be paying my usual £10. (must get it paid off quickly). Are people possibly mis-reading the new terms and conditions. I believe the £10 will be all that has to be paid. Could be wrong tho'

John

going2die_rich

Dylanwing wrote: »

More stunning work by the credit card companies. The truth is that they boobed a few years ago in reducing the minimum payment from the norm of 5%, presumably so that customers could 'afford' to carry bigger limits. Now the limits are being taken, the payments go up, all under the banner of 'responsible lending' no doubt. So once again, the Bank messes up, the customers pay!

Is it the banks messing up or the customer to blame? If someone asks you if you want to buy a car without seatbelts or a airbag but gives you a discount, is he the fool for selling you it, or are you the fool for buying it when you crash and go flying out of the window?

You are adults, therefore have to have some sense of responsibility for your actions. Anyone with any sort of common sense would know borrowing beyong your means is not a good thing. For some the gamble pays off, for others it doesn't.

I do agree though that banks should be more careful on just how much credit they allow, but each person has to also have some sense of responsilibty when they sign up for the loans/credit.

going2die_rich

Dealmad wrote: »

I hope they dont all do this

Thanks for this useful info ,being only 2.25% was good and easy for people to chose what they want to pay and can afford to pay each month.

Yes well all know if we pay the minimum each month it takes longer to pay off but thats upto the individual....... but i don't thinks its fair that if you signed up for 2.25% then they can just change it when ever they like ....i suppose some would even stick up for banks if they were to rise it to 10% :rolleyes:

They are probably doing it to reduce their risk with the credit crunch coming along, so by reducing what they have loaned out, they can find it easier to offer "safe" customers the money so continuing their profits.

The banks aren't your "friend", they are a businesss that are out to make as much money from you no matter what hardship that puts you in. People need to stop trusting banks as if they will always give them what they want just because they get a good deal at the start.

Intergalactic_Floozie

Careful ly, I think you are right actually, I have had a look at the letter and your explanation makes sense, and I have just read that I have to pay 5% of the balance (phew) so they haven't changed it, they have just changed the minimum from £5 to £10.

jonesMUFCforever

Dylanwing wrote: »

Thank you Ejones, always happy to make you chuckle-
In brief. Banks reduce minimum payment. Banks increase credit limits. Individuals make borrowing decisions based on these limits and repayments (Often bad decisions I agree).

We agree on something there.

However anyone budgeting on minimum payments only; are on the slippery slope anyway.As you are probably aware it can take 16 years or so for a credit card debt of £5k to be repaid in this way.
I've had mortgages for less!

Chloe

Careful_ly you are correct in what you say:

"if the balance shown on your statement is more than £10, it will be whichever is the LEAST of 5% of the statement balance OR the total of any payment protection cover charges, interest, handling fees and default charges plus £5, provided that it will always be at least £10"

In plain language, this means an additional £5 on top of what we are already paying. I rang Alliance and Leicester and MBNA today who have confirmed this.

I know this means we will pay practically nothing off the amount borrowed but at the moment this is a bit of breathing space for me whilst I get myself back on track.

Chloe x

blakeyjo

I had the same letter today and when I rang them (about the new interest rate) was told that as I'm on a 0% balance transfer my minimum payment per month is going up from £5 to £10 per month - but I'll be paying more than that otherwise it'll take an age to pay off!