Minimum Repayment Discussion

chattychappy

How can they increase the minimum repayment at your request? The minimum is the minimum. You just pay what you like, when you like - provided they receive the minimum between statement generation and the due by date.

DD is a concession which some people find helpful whereby the bank collects the money to save you remembering. Obviously there is some limit to the flexibility of these in that you tend to have to pay the min only or pay the full balance. But you can still pay extra and you don't have to go with DD at all. I never do. I just decide what I want to pay and pay it. Surely others can do the same, as it seems you have?

MrGreen

clarebearuk wrote: »

I discovered that my Barclaycard will only let you make one payment per month to your card, which prevents topping up your payments after paying the minimum.

This is not the case, Barclaycard in my experience do not allow you to make just one payment, you can make as many payments as you like.

I have been a Barclaycard customer for many years and have made many payments during the month, what they do is that if you make a payment before your DD is due to go out then they don't take the DD. So the best thing to do is let the DD go out and then make your extra payments after that or make your payment but make sure that it covers the minimum.

I quite like the way Barclaycard works as you can set up a standing order for a set amount to go out after your statement date and the DD will not be taken, so you can pay a fixed amount every month thereby paying off more of your debt than just paying the minimum. With other cards who take out the minimum regardless of your DD you have to change the extra amount every month or end up paying more than you've budgeted

clz4

From a slightly different angle I have just been advised by Virgin Credit Card that they are changing the way they calculate the minimum payment from the 1st April 2011.

They have had it set to £25 regardless of the balance but are now making it 1% of the balance plus any interest, charges etc. This is in effect almost quadrupling the amount I will have to pay back each month.

I would love to pay the credit card off and am normally pretty good with money and have, since being made redundant the end of 2009 been able to keep paying the mortgage and the bills by juggling money and transfering a loan and another card onto the Virgin card to bide myself some time until I can secure employment - but I now fear that I am loosing the battle!

When I called Virgin they said that this 1% + interest was dictated to them by the "Bank" to bring them in line with other card issuers. I don't understand this statement as most card issurs expect you to repay 2.5% ot the outstanding balance??

Virgin also said that they cannot help if I expect difficulties in paying to be short term. However they will not help long term either as I have transfered debt to them since being out of work. Then then told me that they were suspending the credit faciltiy on this card so that I cannot get more credit from them until the card is paid in full. This has made me slightly angry but I don't actully want to keep putting money onto this card and have transfered all the deblt have (barring mortgage and student loan) already! When it is paid I will NEVER get a credit card from Virgin again.

What I would like to know is if they can get away with giving me 1 months notice of a 300% hike in the amount I have to repay each month?

If anyone else has had a similar experience any advice would be appreciated.

Cookie2509

I like to set a goal of paying the last Months Interest in addition to the current months minimum payment this reduces the monthy payment but for the life of me I wouldn't know how this would affect the term of the repayment. can anybody assist.

skiba1986

Hi, quick questions to ensure I don't cause myself a big problem.

I have been approved for a card with 0% on purchases for 12 months.

I have an insurance quote which is £100 cheaper if I pay up front.

If I buy on the credit card and pay them the insurance cost/12 each month will I be charged anything as my understanding is that I wont.

Anyone in agreement or useful comment/

chattychappy

Yes, that should be fine. No charges/fees from the credit card.

But the offer will likely expire 12 months from the date your application for the card was accepted (phone them to check) NOT when you paid for the insurance... so you might be safer to divide your payments over 11 months.

HappyMJ

Does it hurt my credit rating to only ever make the minimum repayments?

I got a letter today from Capital One reminding me that the longer I make minimum repayments the more it will cost me. I know that.

However, the balance that is outstanding is a "life of balance" transfer at 3.87%. My savings rates are around that so I only ever intend to make the minimum repayment of 3% or £5 whichever is higher. According to the MSE calculator it will take 14 years 9 months to pay of the original debt of £7900 and cost me £920 in interest. I've had the card for about 6.5 years so far and the balance is about £950 and it says I have 8 years 4 months to go with only another £102 in interest to be added in that time. My mortgage rate is slightly lower at 3.75% so I've been overpaying that instead as it is variable and the capital one rate is fixed forever. I feel that it's my small hedge against rising interest rates. It worked quite well when the amount outstanding was bigger and the rates went up a little. It hasn't really saved anything over the last year but only one rate increase and I'll be saving again compared to the mortgage.

cavim

I saw in a Which Online article (29 March, I think) that, although card companies have to charge the new 1% minimum payment plus interest for new customers, they don't for existing ones, though MBNA and others have applied the new basis to all customers. Which suggested contacting MBNA if the new minimum payments are causing problems.
My partner & I have 4 MBNA cards between us (2 of them on suspended accounts as we weren't prepared to accept extortionate interest increases proposed). As you can imagine, the new min payment basis, which has almost doubled our minimum payments, has caused us problems since 1 April.
Now to the point of my post (!), has anyone contacted MBNA and got them to reduce their mimumum payments back to the previous minimum payments? And, if so, did MBNA then want to start following "debt" procedures (eg no more transactions on the "live" cards) or are the accounts carrying on as previously but with lower minimum payments?

Cell

I sent them a message and they simply said that's their policy.

The impression I got was that they thought they were doing me a favour by saving me interest.

I would imagine that any alteration would be seen as 'entering into an arrangement'

dazla

cavim wrote: »

I saw in a Which Online article (29 March, I think) that, although card companies have to charge the new 1% minimum payment plus interest for new customers, they don't for existing ones, though MBNA and others have applied the new basis to all customers. Which suggested contacting MBNA if the new minimum payments are causing problems.
My partner & I have 4 MBNA cards between us (2 of them on suspended accounts as we weren't prepared to accept extortionate interest increases proposed). As you can imagine, the new min payment basis, which has almost doubled our minimum payments, has caused us problems since 1 April.
Now to the point of my post (!), has anyone contacted MBNA and got them to reduce their mimumum payments back to the previous minimum payments? And, if so, did MBNA then want to start following "debt" procedures (eg no more transactions on the "live" cards) or are the accounts carrying on as previously but with lower minimum payments?

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.