Santander 'unfair' interest

Dandelion1_2

I tried to pay off a credit card balance after taking out a 9 month free interest offer. I repaid the full balance less the minimum payment which I assumed would be taken by DD as always. However, The DD for the minimum payment was not taken by Santander and I was charged interest. I thought it must be a mistake but apparently because I repaid the balance more than 5 days before the DD minimum payment was due, the minimum payment was cancelled, thereby leaving an amount owing of exactly the minimum payment. So, If I had paid a few days later, I would not have had to pay interest. I think this is so unfair and wondered if this is just Santander or do other credit cards operate this ridiculous system. I phoned to complain but just told it was Santander policy not to refund interest. How do you think I could complain further?

ambrose13

Hi

I have a couple of questions about your situation.

How come you were paying a DD payment when the loan was interest free? What was the minimum payment for? Was this to reduce the balance of the debt each month? Just trying to establish if this was a 0% loan or not?

Mike

shortcrust

Lots of cards work in the same way - if you make a manual payment it reduces the direct debit amount. All stated clearly in the terms and conditions you agreed to so you don't really have any grounds for complaint. However, it's worth writing a polite letter - I find if you take the "I've been so silly and and I'm so cross with myself..." approach you can usually get things like this refunded as a goodwill gesture.

shortcrust

ambrose13 wrote: »

Hi

I have a couple of questions about your situation.

How come you were paying a DD payment when the loan was interest free? What was the minimum payment for? Was this to reduce the balance of the debt each month? Just trying to establish if this was a 0% loan or not?

Mike

This OP had an interest free credit card. That means that no interest is charged on the credit card balance for a given period, but you still have to make a minimum monthly payment.

redpete

ambrose13 wrote: »

Hi

I have a couple of questions about your situation.

How come you were paying a DD payment when the loan was interest free? What was the minimum payment for? Was this to reduce the balance of the debt each month? Just trying to establish if this was a 0% loan or not?

Mike

You still have to make monthly minimum payments during the 0% period.

PeacefulWaters

Dandelion1 wrote: »

I tried to pay off a credit card balance after taking out a 9 month free interest offer. I repaid the full balance less the minimum payment which I assumed would be taken by DD as always.

Silly to assume.

However, The DD for the minimum payment was not taken by Santander and I was charged interest. I thought it must be a mistake but apparently because I repaid the balance more than 5 days before the DD minimum payment was due, the minimum payment was cancelled, thereby leaving an amount owing of exactly the minimum payment. So, If I had paid a few days later, I would not have had to pay interest. I think this is so unfair and wondered if this is just Santander or do other credit cards operate this ridiculous system.

My Halifax card works the same way as you describe.

I phoned to complain but just told it was Santander policy not to refund interest. How do you think I could complain further?

Contact the official complaints line and start again. Be polite but firm in stating the point that it was clearly your intention to pay in full and ask (don't demand) for a refund of the interest as a gesture of goodwill.

If they refuse, escalate to a supervisor.

If they refuse, ask for it in writing together with details of how to escalate it to the FOS. And make it clear that you will do.

They have applied their T&Cs correctly. You are reliant on a gesture of goodwill. The FOS will rule against you, but at least that will cost Santander money that will be more than your interest.

bengal-stripe

Dandelion1 wrote: »

However, The DD for the minimum payment was not taken by Santander and I was charged interest.

So you had an interest-free deal that expired on, let's say, the 25th of last month and you've paid everything back apart from the minimum of maybe 10 or 20 quid.

When the bank charges interest from the 26th, you will be charged interest on the outstanding balance of £ 10 or 20. It doesn't work like a 'buy now, pay later' retail deal where you will be charged retrospectively from the start of the deal.

£ 20 at 19% APR will cost you about £ 0.01 per day. Pay the balance today and on next month's statement you'll find an interest charge of less the 10 pence. Hardly an amount of money to make a song and dance about.

By all means, write a letter of complaint, but the stamp will cost you much more than the interest charged.

SuperHan

Classic case of you can't please all of the people.

I prefer my cards to work this way, so if I pay off the balance early for admin reasons I don't end up with the card being in interest.

The mistake you made was assuming. Santander treated the additional payment as the minimum payment for that month, as per their T&Cs. Check next time. Ring and grovel this time.

Dandelion1_2

Thanks for all your replies. I think we have to admit we made a mistake and learn from it! I like the idea of complaining to the FOS so that Santander don't make any money out of us though. The interest is considerably more than a few pence. The balance was high and the interest was not taken just on the minimum payment outstanding but on the full amount from the previous month statement until the date of repayment.

molerat

Dandelion1 wrote: »

Thanks for all your replies. I think we have to admit we made a mistake and learn from it! I like the idea of complaining to the FOS so that Santander don't make any money out of us though. The interest is considerably more than a few pence. The balance was high and the interest was not taken just on the minimum payment outstanding but on the full amount from the previous month statement until the date of repayment.

In which case you must have been late paying the 0% off. I know that my deal ends on a certain date and not on a statement due date, something that catches many out.

My Santander statements are 1st, due date is 27th but my interest free period is clearly shown on each statement, Balance £xxxx.xx Interest 0.000% to 03-04-2017 which means it must be paid off by then and not by April 17 due date.

Dandelion1_2

No, we weren't late paying. Because we had not completely repaid the balance by the specified date ( underpaid by the amount of the minimum payment), we were charged interest on the whole balance for the month from the previous statement date to the date we paid the 'partial'payment. If the minimum payment had also been paid or we had paid our partial payment within 5 days of the due date of the D min payment we would not have been charged interest.