Minimum Repayment Discussion

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  • Memetic
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    I ended up needing to confirm something this weekend with Virgin / MBNA and in the course of the conversation found that they had changed my DD back to paying the minimum amount (£5 in my case as being on a a 0% deal at present means no interest or charges are due - another trap in the balance transfer game.)

    They are aparrently writing to me to say they have varied the DD.

    No amount of discussion would move them, I have now set up a standing order.

    They are sticking to the line that this is to protect customers from charges. I still have not had a letter informing of the change of policy.
  • DestroyingAngel_2
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    Virgin MBNA have decided to stop setting up fixed amount DDs because there are too many customers who forget to "top up" their payments when on fixed amounts.

    For example, if you have a fixed amount DD of £50 and your minimum payment is £52 one month and you forget to pay the extra £2 manually, your next statement will show a late fee, and if you were on a promotion, you'd lose the promotion and start incurring interest. This, of course is not the fault of Virgin MBNA but the customer's fault ... but don't we all know how easy it is to blame someone else for our own mistakes?! So, Virgin MBNA have decided that, instead of having customers clogging up their phone lines complaining about something customers could and should have controlled themselves, they're stopping fixed amount dds and are only offering minimum amount dds and full amount dds. Time to take more responsibility for your own spending habits, folks!

    Obviously, if you're on a 0% promotion, the full amount dd will be a no-no. Set up a minimum amount dd and get your bank to set up a standing order for however much more you want to pay on top of the dd.

    You would be informed by letter of any changes Virgin MBNA make; again, the problem is, not many of us read everything that comes in the post, right? You can bring a horse to water, but you can't make it drink.
  • ICan'tStandIt
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    Virgin MBNA have decided to stop setting up fixed amount DDs because there are too many customers who forget to "top up" their payments when on fixed amounts.

    This is the reason why most lenders won't offer fixed direct debit amounts, but I've never had any problems getting standing order details from the places I use.

    Most of the time they're printed on the "ways to pay" section of the statement.

    Never leave a direct debit collecting just the minimum payment. I don't tend to use direct debit for credit cards, I would rather make a manual payment which is at least double the minimum.
  • sortingfunds
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    I remember trying to pay extra on my virgin credit card over the phone and they said they were unable to accept it, i had to go to a bank or pay online. Yet another way to delay paying off quicker. I would always advise setting up dd for minimum payment just so that you don't default and then pay whatever you can afford to clear it quicker. If i was paying just my minimum payments it would take me 17 years to pay but i have worked it out that i can clear it by August 09 bit of a difference!
    Proud to be Sorting my Debts
  • DianeM
    DianeM Posts: 152 Forumite
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    If your monthly bill states that your estimated interest for next month will be .......... if you make a minimum payment of .................... why does the next months bill always charge double what it has stated.

    Very occassionally I will make the minimum payment so I can pay other bills off and then always get stung by this.

    Am I missing something?

    PS I have spent the last hour looking for the answer to this on the forum.
    Ta
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    DianeM wrote: »
    If your monthly bill states that your estimated interest for next month will be .......... if you make a minimum payment of .................... why does the next months bill always charge double what it has stated.
    Because you've continued to spend on your card after that statement was produced.

    You didn't clear your previous statement in full by the due date so you've lost your "(up to) 56 days interest free on purchases" benefit.
  • DianeM
    DianeM Posts: 152 Forumite
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    ok, I thought I hadn't used it as it's more for ebay than anything but I had.
    Cheers
  • I have three credit cards, all with 7k on them. Virgin are 34.9% APR, Egg 26.9% APR and Mint 18.9% APR. Until this month I have only been paying the minimum and not checking my statements.

    Now I have checked and checked the APR's with each lender.

    I have worked out that I have £1350 that I can spend a month on debts, cutting back my spending by 75%.

    Am I right in thinking I should be paying the minimums on the Egg and Mint Cards and paying everything else towards my Virgin card until it is cleared?
  • latecomer
    latecomer Posts: 4,321 Forumite
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    Absolutely. Pay off the highest interest card first. You might also want to try and get some of the debt moved onto a 0% card if you can one.
  • Mrs_Ryan
    Mrs_Ryan Posts: 11,832 Forumite
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    I have a Citi Mastercard and pay by debit card over the phone each month, they keep pushing me to set up a DD but I too like to pay more than the minimum but not the full so I prefer not to... and given the fact my bank are so useless I wouldnt trust them not to make a mistake!!!
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