Minimum Repayment Discussion 11 September 2007 at 6:13PM edited 10 June 2010 at 1:09PM in Credit cards 100 replies 40K views

Former_MSE_Wendy

Danger! Minimum Repayments

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misterfish

I've always been unhappy with the A+L credit card repayment - just a minimum of £5 which means it would never be paid off. According to the calculator it would be over 100 years and I'd be dead!

I usually pay on line where the £5 minimum is the default option so I have make sure I fill in the correct payment details. I pay off in full each month.

The other annoyance is that time between getting the bill and making the payment is reducing - a few years ago we had to repay by (about) 4th of next month, but this has now crept forward to 26th of the current month.

MisterFish

bigbloke45

One of the big problems of paying off credit cards with a direct debit is that you can usually only opt to pay the minimum or clear the whole balance. There may be some cards that will allow you to pay a fixed amount of each month, but I don't know who they are. Anyone out there like to tell me who, please?

Another option is to set up a Standing Order to the credit card provider for a fixed amount each month.You can decide how much and it is not too difficult to find out how long this will take to clear the balance, alternatively you can calculate (maybe with a little help from a friend) how much you need to pay each month to clear the debt over a certain period. The beauty of this method is that, each month, you are paying off a bit more capital than the last month simply BECAUSE you are not reducing the amount you pay each month in line with a reducing debt.

I know it works because I have done it for my son. He now owes less than
half he did 18 months ago and will have paid off the debt in full in another 18 months. Had he just done minimum repayments it would have taken about 37 YEARS to clear the debt!

All you need to do is to use the credit card providers bank details to set up a standing order. Just 'phone them and theyshould tell you.

Feedback, please!

Sagaris

That's what I've done with my credit cards - but they were really reluctant to give me the details to set up a standing order, and very keen to get me to do a direct debit to pay them the minimum amount every month! I stood my ground and got the details and now pay a set amount (more than the minimum!) every month.
It's scary looking at how long the minimum payments will take to clear the debt though! :eek: Makes me more determined to get everything paid off ASAP.

jayjayuk

i do online banking with nationwide...

most credit cards you can select from a drop down list. when i get the statement i just click who and how much and it gets to them within a few days, much easier than posting or direct debits..... and you can do it anytime of the day. :P

or if they dont have it in the drop down list e.g. the pay and go cards. you just put the details in.

very easy....

i make sure i have the minimum payment coverd,, then any spare cash, ill send on top using the same method using a standing order. where i choose how much.

kacharia

I have Citi Bank card and despite my efforts they will not accept any additional payment-only minimum or full. Is there any way any member could suggest that I could pay more (If I do pay more they deduct it from the next direct debit)
Advice and help sought. Thanks

Dave_the_Ginger_Cat

kacharia wrote: »

I have Citi Bank card and despite my efforts they will not accept any additional payment-only minimum or full. Is there any way any member could suggest that I could pay more (If I do pay more they deduct it from the next direct debit)
Advice and help sought. Thanks

The only way would be to set up a standing order, send extra cheques in, pay by internet banking, or pay extra over the counter using the bank giro slip on the bottom of the statement. If you persist, they will tell you the standing order details - just make sure that if you do spend on the card, then you keep the payments high enough, as you would not want to get a later fee because of this.

Most online banks have a drop down box with details of all the proper bank details for the credit cards. I bank with Barclays, and if you key in that you've got a Citibank card with a certain account format, they already have the details - you just need to key in your 16 digit card number.

katiecoughdrop

You don't have to beg the company for the standing order details. they are usually on your credit card statement for internet bank payments. Look for a section on the back saying something like 'Pay through your Bank' you'll need a sort code which is 6 digits and their account number, then add your credit card number as the reference. I've done it with loads of regular payments, it means you're in control and not the credit card company

maddriver

bigbloke45 wrote: »

One of the big problems of paying off credit cards with a direct debit is that you can usually only opt to pay the minimum or clear the whole balance. There may be some cards that will allow you to pay a fixed amount of each month, but I don't know who they are. Anyone out there like to tell me who, please?

Egg Card certainly does, you have option of Full, Minimum and Fixed Monthly amount. You can also change this up to 5 days before the payment is due to be taken.

Other than that, as others have mentioned, set up a standing order. Usually the details you need are on the back of the statement.

Memetic

This week Virgin Money refused to accept a request to set a fixed sum for a direct debit, telling me that they were stopping accepting these requests because some customers on fixed DD had accidentally spent more than they thought so incurred charges as the direct debit covered less than the minimum payment.

I pushed, saying I had not been notified in writing of the change. The call taker relented, telling me the request had "just gone through"

Looks like another attempt to make it harder to repay.

Mozette

How odd, when I got my stuff through from Virgin, and in the phone calls etc they were pushing the idea of a DD for either the full, minimum, or any other amount.
Mind you, I'm paying the minimum & sticking the rest in an interest bearing account like a good MSE-r should!
Perhaps it depends who you speak to; the chap I spoke to was lovely.