Why does RBS direct debit my account 10 days before credit card due date?

cse

The real answer:
- if you pay the minimum payment by direct debit, taking the payment as late as possible in the month maximises your average daily balance, therefore maximising the amount of interest charged
- if you pay the full balance by DD, you don't pay any interest, so it is in the bank's interest to minimise your average daily balance and any associated funding costs. They do this by taking the DD payment as early as reasonably possible

This is basically why cashback cards have tended to always have fewer interest free days than other cards (45 vs 50-something) - the majority of cashback users pay in full, so getting everyone on those cards to pay early reduces the issuer's costs

prowla

So, basically it is a sleight of hand - the CC company is reducing your interest-free period.

patanne

I have obviously got a much better cashback cc than I thought I had. My DD payment in full is taken 52 days after the first entry on my statement and as I have said before is taken on the date they say it will be taken.

planteria

which provider?

SnowTiger

joroshe wrote: »

I didn't actually provide an excuse. if you contact any of the banks that is the answer you will get

That surprises me greatly because none of the other credit card providers I use take a full Direct Debit payment ten days before the due date.

SnowTiger

Thrugelmir wrote: »

The T&C's are very clear.

If you set up a Direct Debit for the minimum or a fixed amount, the payment is claimed 25 calendar days from the statement date or shortly afterwards.

If you set up a Direct Debit for the full amount, the payment is claimed 15 calendar days from the statement date or shortly afterwards.

I don't think anyone's suggesting they're breaking the T&Cs, and it is clearly shown on statements when the Direct Debit will be taken.

The initial questions were:

saskay wrote: »

Aren't they effectively reducing the no.of interest free days I get by 10 days?Is this a fair business practice?

Why do they do it? I think, as the OP mentioned, it's to reduce the number of interest free days.

Is it unfair? It does penalise customers who pay in full by Direct Debit.

chuckley

This is why I pay manually.

but 10 days is mad extreme. what if it bounced yet it wasn't even due?

YorkshireBoy

chuckley wrote: »

what if it bounced yet it wasn't even due?

You would just incur the £10 returned payment charge. And a subsequent £12 late payment fee if you didn't spot it during the next 10 days.

Ben8282

I have a charge card which takes the payment 10 days after the statement date but have never heard of a credit card which takes direct debit payments 10 days prior to the payment due date.
The direct debit CANNOT be taken prior to the agreed date; to do so would be a breach of the direct debit guarantee.

planteria

American Express.. now you've heard of one Ben;)