Minimum Repayment Discussion



  • cavim
    cavim Posts: 40 Forumite
    dazla wrote: »
    I contacted MBNA about this, they offered to revert my payments to the previous minimum but as a result I would be in one of their debt repayment plans and would have an 'arrangement to pay' marker on my credit file for 6 yrs.

    Many thanks for your helpful response, and so quickly (thanks too to the previous responder to my post, also very helpful).
    Isn't it appalling how credit card companies can change the terms of our agreements with them willy-nilly (and usually to their advantage and our disadvantage) yet this can't happen with loan agreements.
    No doubt this will be one of the PPI-type consumer claims/refunds of the future but I'd rather it be sorted now than many of us get further into debt because we were previously managing ok but are now being put into a debt situation by the card companies themselves! (As they do when they increase interest by unreasonable amounts). Our debt situation has been caused solely by card companies continually moving the goalposts, making financial budgeting/planning for more than a month or two at a time impossible over the last 2-3 years.
  • amp88759
    Dear Forum

    I would like some advice. I took out an credit card with 0% on card purchases for 9 months.

    The introductory paperwork said that the 0% ended on my September 2011 statement (the statement date not the payment due date). It did not specify the date in September.

    I received an email 09 Sept 2011 saying that my latest statement was ready to view: I opened the statement and saw that there was an estimated amount of interest to be charged October 2011. The Payment due date was 23 Sept 2011. The statement date was 06 Sept 2011.

    They have been taking minimum payments every month: it was always my intention to pay the balance in full when due.

    The statement dates have varied every month and have not been predictable: ranging from 4th to the 7th of the month.

    I was informed over the phone that I will be charged interest from the 06 Sept to 11 Sept on the outstanding balance for those dates.

    I feel that this is unfair as they emailed three days after the statement date and therefore gave me no opportunity to pay the bill in full without incurring interest: it is strange that the full balance is due on the statement date and not the payment date (I acknowledge it stated this on the introductory paperwork but did not tell me the exact date so that I was unable to diarise this). Also the statement dates have varied month to month. I was notified 3 days after the amount was due.

    Do I have a complaint?

    I feel that I have not been notified when the full amount was due so that I could avoid interest charges.

    I have paid the amount in full on the September statement this evening (Sunday so they will not receive payment until Monday 12th Sept) but I will then receive a statement next month with five/six days interest. Funnily enough this will be due on the payment date not the statement date.

    I feel I have been 'conned'.

    How should (or should I) complain?

    Thanks in advance.

  • chattychappy
    Well.. the deal was 0% for 9 months - provided that that is what you got, I don't think you were conned. It was always open to you to confirm the exact date with them if you wanted to run it to the wire.

    I agree it is a bit daft sending out the letter to you so as not to arrive until a few days after the deal has ended. But, you could say, why should they remind you anyway?

    Having said that, the lending code says:

    122. If a credit card has an introductory promotional rate the expiry date of the introductory promotional offer should be shown on the front of the statement or in a separate, prominent personal notification to the customer. This should be given between four and eight weeks before the offer expires.

    123. It is acceptable to exceed the four or eight week period if the best way to provide information about the expiry of an introductory promotional rate is by a message in, or with, a monthly statement.

    So if nothing was on your statements, then you do have grounds for complaint. I would draw their attention to this and see if they will refund the interest.
  • YorkshireBoy
    amp88759 wrote: »
    I feel I have been 'conned'.
    The card is provided by MBNA isn't it?

    If so, take a look at page 3 of 4 in your statement pack (each and every one since the first one 9 months ago!) where you should see the end date (and hence your September statement date) clearly shown.
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
    Combo Breaker First Post Newshound!
    edited 12 September 2011 at 12:16AM
    Andrew. I understand you are probably annoyed and there does appear to be some confusion about the exact date that the interest period ended, but at the most you are going to be charged 6 days interest.

    In your place, knowing that interest was going to be charged from the September statement date, I would probably have made full repayment by the payment due date of the August statement to be on the safe side.

    You say the statement dates vary from the 4th to the 7th and this month the statement date was the 6th. Knowing that interest was to be charged from the September statement date, why did you not make full payment prior to the first likely statement date (i.e. 4th). Unless I am mis-reading something, you knew you would be charged interest on your balance from the September statement date, and that date could have been as early as 4th September.

    I really don't think you have been conned here. I think a complaint based on 'you didn't me' would be pretty weak and you have benefited from 9 months at 0%. Do nothing for now, wait until you get your next statement, see how much interest you are actually charged and then decide if it's worth bothering about.
  • carduserannoyed
    Has anyone else had this experience and what did they do about it?

    E.g. my MBNA credit card has min repayment of interest +£5 so in theory I should pay off at least £5 every month of the balance. However, the interest they charge me on some months is far more than the min repayment. SO my balance is more than I started with last month.
    Also happens on a Barclaycard I have closed.

    I do not use the card and havent for many many months. e.g. balance has gone on several months and I have gone back over several years no and can see it hasp happened quite often.

    I want to write in and complain as feel it must be illegal.
    They are either charguing too much intersts or not taking the correct minimum payment. Can anyone advise their own experience of this?
  • Cell
    Cell Posts: 580 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    The interest plus £5 is confusing but actually relates to the interest from the previous statement. The interest on the current statement may be less due to it being a shorter month, or the time between statements being slightly less, but that is only calculated at the end of a statement period.

    So while in some months your balance will increase equally there will be months where it reduces by more than £5.

    All that said, I thought that ALL MBNA cards, whether existing or new, had changed to the 'interest plus 1% of balance' method of repayment.
  • Stivh
    Stivh Posts: 2 Newbie
    Hi all,

    This was touched on briefly earlier in this thread, I think, but I didn't see any followup to it.

    I have a Barclaycard which has PPI associated with it. If you make the minimum repayment each month, as they rightly point out, it may take longer to clear your balance. However, what they don't point out is that if you have PPI and make the minimum repayment each month, you will in fact, *never* clear your balance. Actually, the balance will increase each month and so will the amount that you owe (and hence the minimum repayment, which will still not cover the interest + PPI premium).

    Now, I understand that they are allowed to neglect the PPI premium for the purposes of calculating the minimum repayment, but should they be? Shouldn't they at least have an obligation to point out that minimum repayment + PPI means increasing debt?

    I've paid the balance off in full now anyway, but is this common to all credit card providers? Has anybody ever taken a provider to task over this, and if so, what were the results?

  • SnowTiger
    SnowTiger Posts: 4,461 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Stivh wrote: »
    Now, I understand that they are allowed to neglect the PPI premium for the purposes of calculating the minimum repayment, but should they be?

    Isn't PPI like any other product or service you use your credit card to pay for? But it (usually) just happens to be provided by the card provider?

    Should Tesco include purchases punters make at their stores in their minimum card payment, simply because they're made from another part of their business?
  • Stivh
    Stivh Posts: 2 Newbie
    If Tesco Finance were choosing and procuring the purchases made for me at their stores, then perhaps yes, they should include them in the minimum payment.
    Or at least say "by the way, if we keep adding to your card balance like this, then your minimum payment's not going keep this debt under control".
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