Minimum Repayment Discussion

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  • Rainbow_Liberty
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    ltn wrote: »
    I've just been told by virgin money that I can't set a direct debit for more than min payment in case it does not cover the charges.

    I said - isn't that my responsibility? I am not 5! (yes I was narked at been fed the obvious BS).

    The guy told me it was because they are a responsible lender.

    I never realised that the lenders were such nice caring people, Grrrr

    Whilst I know it is a bit of a pain and appears to be doing everything twice, but if you do have more that you can pay why not sent it as an additional payment each month.

    The Direct Debit is set up so that you never miss your minimum payment and therefore won't incur any late fees but it is not in their best interest for you to repay the debt quicker as they make their money on the interest they charge you.

    If you have extra available just pay more to them each month, or whenever you have it available to you, and your safe in the knowledge that you will have never missed a payment date. WIN WIN
    Rainbow
    Liberty
  • golfillini
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    Hello All

    I have for the last 2 years had an informal arrangement with my creditors. I pay a pro-rata payment to all based on a budget plan from the CCCS.

    Most of my creditors require updates and new budget plans every 6 months.

    What % per month would a creditor except that would stop them from contacting me every 6 months.

    If i offered to pay 1% per month of my debt would this help
  • smarties1
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    :mad: i have high balances on these card, not only have they increased my interest rate but also changed (without notice) how the calculate my minimum repayment with 2% or how they see fit. I now no longer can afford to pay my minimum repayments - can they do this?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Yes they can. You should have been advise of this in the same notification as the interest increase.

    They will have done this to ensure your min payment is covering at least the interest, so your balance does not increase.
  • kbrown84
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    I've just been told by Barclaycard that I have gone over the limit on my credit card because I've been making the minimum payments and that I should have been making extra payments each month. What I don't understand is that for over a year making the minimum payments, whilst I realise is the naughtiest of maughties, covered the interest and charges made. However, from December on now that I've checked, the minimum payments dropped below what was being charged to the account and was slowly pushing me towards and then last month over the limit. I thought the whole point of the minimum payments was that it covered the interest and charges, but the quasi-helpful man on the helpline says not.
  • chattychappy
    chattychappy Posts: 7,302 Forumite
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    kbrown84 wrote: »
    but the quasi-helpful man on the helpline says not.

    Brilliant stuff.. "quasi-helpful"..

    Yep it is possible to run out of limit by only paying the minimums. Don't know if minimums are meant to be at least interest and charges... think someone once said they are supposed to be.
  • izools
    izools Posts: 7,513 Forumite
    Combo Breaker First Post
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    ltn wrote: »
    I've just been told by virgin money that I can't set a direct debit for more than min payment in case it does not cover the charges.

    I said - isn't that my responsibility? I am not 5! (yes I was narked at been fed the obvious BS).

    The guy told me it was because they are a responsible lender.

    I never realised that the lenders were such nice caring people, Grrrr

    Set up a standing order instead but set this to leave your bank account half way between the statement date and due date to account for future fluctuations in the billing cycle :o
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  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    Don't know if minimums are meant to be at least interest and charges... think someone once said they are supposed to be.
    New legislation/regulation means they are supposed to cover the interest already accrued and posted to the account on statement date.

    However, for those people sailing close to the wind and who continue to spend, having lost the, say, "up to 56 days interest free" credit (because they didn't pay the previous statement in full), the next statement could see an overlimit fee due to interest accruing in this new statement period. The "estimated interest next statement" figure does not allow for this continued spending.
  • borris89
    borris89 Posts: 24 Forumite
    edited 14 July 2010 at 3:07PM
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    Hi all, i have a halifax credit card, i am paying the minimum amount every month (will pay more in the future when i can).
    My problem is that with just paying the minimum each month that they say and take, i have a balance that is increasing every month, the card has not been used for over a year now so this is not affecting it, is there no legislation that means that the minimum repayments must decrease the overall balance (even if it is my a small amount)?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Yes, there is. Do you have PPI on the account? That doesn't have to be reflected in the min payment.

    Alternatively - is a lot of your balance from cash advances? The min pay is built around purchase rates, not cash (which usually has higher rates), so that could cause your balance to grow.
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