Unfair Over Limit Fee?

Telly74

Hi everyone, looking for some advice please.

I have an Aqua Credit Card and have always kept my account in order.

In the run up to Christmas I used up most of my credit limit. I was within £25 of my credit limit before my statement date with all payments up to date, so was not concerned at all about the account.

Then when my statement date in December came, I got a text message saying I was over my limit, but I hadn't made any more purchases. It turns out that the interest charge was put onto my total balance, which then pushed me over my limit and was charged £12.

I was ordered to pay £54 minimum payment for the month before January 4th. I immediately paid over this amount and paid £60 on 18th December. Believing my account to be back in order and thinking that perhaps I had made a mistake somewhere I didn't contest the £12 charge. I did not use the card in the coming weeks as I wanted to start paying this off in January after Christmas so thought nothing more of it as I had paid what was due for the month.

My statement date comes around again today for January and again Aqua have charged interest to my balance which has pushed me over my credit limit and have charged me another £12 over limit fee! :eek:

I have had a barclaycard years ago and the interest was always included in your minimum payment (probably to avoid this situation), so was not anticipating this at all.

I cannot find anywhere in the T's and C's which says that the "estimated interest" for the following month will be added to the balance each month and that I must keep enough credit limit left to account for the interest being added.

How can I be in a situation where I pay slightly more than the minimum payment for 2 months in a row and then be sent over my credit limit and charged twice? If I am at fault then of course I should be charged, but if I have made payments on time, for more than the minimum payment, not use the card and still am charged, how can this be right? I can find nothing in my credit agreement or t's and c's which state I must leave enough credit for the estimated interest each month. The only info on this is the "estimated interest" amount on my statement, with no other information. I have always been within my limit and always paid just over the minimum payment.

I am going to call up and pay a big chunk off this month as was always my plan, but wanted some advice on this situation before contacting them and if I should dispute the charges at all?

Any comments/help would be greatly appreciated.

Thanks.

jonesMUFCforever

If it is a first ''offence'' a polite telephone call asking for the refund of charges may be in order but if they refuse you have to accept it was your fault and they have done nothing wrong.

Look at previous statements it will show interest added just like the last one.

chattychappy

In general, (according to the lending code), if you just pay minimums then without further spend your balance should fall month by month.

But it does get tricky where there are additional fees involved. Whilst the minimum might include these (as well as any overlimit about), it's still no guarantee interest won't put you over the limit again. It is your responsibility to make sure that you have enough limit spare so that you don't go over when interest is applied.

Perhaps if you give us more specifics (ie statement balances, fees, interest etc) we can look to see what happened.

I can think of 3 approaches to get your fees back:
1) Try and show that Aqua weren't following the lending code in the calculation of the minimum due, or in some way were breaching their own T+Cs;
2) Argue that the fees applied were unfair considering the cost of the breach to them - ie ask them to show how they incurred £12 of costs each time you went overlimit. Penalties are meant to be a reflection of the cost to the injured party of the breach.
3) Phone up, be nice, say it was Christmas, say you messed up, say you'll take more care in the future and that perhaps in cause of goodwill they'll refund back the charges.

I'd go for (3) in the first place. (1) seems unlikely. I think (2) is a long shot, but if you formalised a complaint then perhaps a deal could be done.

Superscrooge

The below text is from the UK card association website

http://www.theukcardsassociation.org.uk/individual/minimum_repayments.asp

For accounts opened from April 2011 the minimum payments will be at least the total of any interest, fees and charges plus 1% of the outstanding balance.This ensures that you are always paying off at least some of the outstanding debt.

So if you did not use your credit card last month my understanding is that the minimum payment should cover all fees, all interest plus 1% of the outstanding balance.

I would definitely query it with Aqua

jonesMUFCforever

I don't think the minimum payment is the issue here - OP ran the card close to the limit (much too close IMO) and the interest charge put her over the limit and therefore incurring an over limit charge.
This is why in post 2, I asked her to look at last month's statement which would have given her an idea of the interest being charged this month.

SnowTiger

Telly74 wrote: »

I was ordered to pay £54 minimum payment for the month before January 4th. I immediately paid over this amount and paid £60 on 18th December. Believing my account to be back in order and thinking that perhaps I had made a mistake somewhere I didn't contest the £12 charge. I did not use the card in the coming weeks as I wanted to start paying this off in January after Christmas so thought nothing more of it as I had paid what was due for the month.

Most of the £54 minimum payment would have went towards the late fee and interest.

Aqua's minimum payment only reduces your statement balance by 1% (minimum £5).

If your balance was, say, £1,200 your £60 payment would only have reduced it by £18.

Aqua's monthly interest is at least 2.592%.

Therefore, if your balance reduced from £1,200 to £1,188, 2.592% plus 1% of the balance (£43.10) would push you over your limit again.

Basically, I think the problem is that you're balance is running very close to your limit. When the interest is added at the end of the month it pushes you over your credit limit.

mcpitman

Fairly binary in my opinion.

Question - Did the actions you took cause you to go over limit?
Answer - Yes (spending, not allowing enough room wihtin credit limit for interest etc)

Question - Is it unfair to charge someone who has gone over their limit an "over limit" charge?
Answer - No.

m4rc

mcpitman wrote: »

Fairly binary in my opinion.

Question - Did the actions you took cause you to go over limit?
Answer - Yes (spending, not allowing enough room wihtin credit limit for interest etc)

Question - Is it unfair to charge someone who has gone over their limit an "over limit" charge?
Answer - No.

Yea, that's helpful, kick someone when they are down eh....

chuckley

OP, surely you knew interest would be added since you failed to pay the full balance the previous month? so you would've left a decent amont availble for them to add the interest wile still within limit.

I hope this wasn't the rewards account.

shortcrust

m4rc wrote: »

Yea, that's helpful, kick someone when they are down eh....

Give over. It's a succinct and accurate answer to the OP's question. Should we pretend the OP's not at fault to make them feel all warm and fuzzy?

m4rc

shortcrust wrote: »

Give over. It's a succinct and accurate answer to the OP's question. Should we pretend the OP's not at fault to make them feel all warm and fuzzy?

Don't see where I suggested it, is that your idea? Very kind!