£11k paid to credit card over 4 years but only £300 paid off debt!

CakeCrusader

A lot of cards (especially ones for people who have poor credit) work like this, most of the minimum payment is used to repay interest rather than the debt, which is why people should always try to pay more than the minimum.

Is it possible for you to apply for a 0% Balance Transfer card? I know you've said you have 10k, but you may need that at some point and it's not wise to use it to repay this one unless you really have to as you may be forced to use the card again after you've repaid it and you'll end up in the same place as you are now. The lenders do send you out a statement every year with info about how much interest you've paid, how much you've spent on the card and how much you've paid off. It may be worth checking through your online statements.

[Deleted User]

Tryingtocleardebt wrote: »

I'm in a fortunate position now where I have my own business and can pay off £10k in one go, and hopefully the rest next month.
With them 'giving me' 3 months interest free I won't add any more interest before it's paid off.

It just seems so unfair that I have paid so much to this company and have nothing to show for it.

Another question, my husband says to pay off the highest APR first but with this situation I want to just get rid of the Halifax card as literally nothing is going off the debt each month.
Would you do the same, or pay off the card with APR of 20.79%, even though £30 a month of the £110 monthly payment is actually paying off the debt?

Didn't you notice each month for all that time that the outstanding amount was hardly reducing?
I hope you are better at doing the books for your business, I really do.

Tryingtocleardebt

Thanks to all those who have commented positively. ☺

No, I didn't realise the debt wasn't reducing as I did what a lot of people do and assumed (obviously wrongly) that something was going off the debt each month. I couldn't afford to pay more, although looking back I might have tried something different if I had known I wasn't paying anything off.
And I also did what many people in debt do, don't open statements. I know this is where things went wrong, but when you are in debt it is very easy to bury your head in the sand, hence why I asked for people to not state the obvious.

To 'venison' - my 2 year old business is very successful, thank you. By the end of this month I will have over £60,000 in my business account, hence why I am now in a position to pay off my debts!
As I stated in my original post, these debts were accumulated many years ago, when I was young, stupid and had an ex walk out leaving me with the household bills and also an £800 a month mortgage to pay, on my own.

Superscrooge

Credit card companies have to put the 'minimum payment warning' on credit card statements to help stop borrowers getting into this minimum payment trap

If you make only the minimum payment each month. It will take you longer and cost you more to clear your balance

I regard this as rather vague. It would be better if the wording was personalised and more 'In your face'. Something along the lines of;

If you only make the minimum payments on your balance of £XXXX. It will take you YY years to clear your balance and you will pay £ZZZZ in interest

Ben8282

If you had actually bothered to check your statements at any time over the last 4 years you would have realised what was happening without having anything explained to you. All you would have needed to have done was to subtract the interest being charged from the amount of the minimum payment being made and you would have seen how much was being paid off.

boo_star

Superscrooge wrote: »

Credit card companies have to put the 'minimum payment warning' on credit card statements to help stop borrowers getting into this minimum payment trap

If you make only the minimum payment each month. It will take you longer and cost you more to clear your balance

I regard this as rather vague. It would be better if the wording was personalised and more 'In your face'. Something along the lines of;

If you only make the minimum payments on your balance of £XXXX. It will take you YY years to clear your balance and you will pay £ZZZZ in interest

Thankfully the FCA doesn't think we're all idiots and require a disclaimer (that people will still ignore) for the obvious.

ViolaLass

Superscrooge wrote: »

Credit card companies have to put the 'minimum payment warning' on credit card statements to help stop borrowers getting into this minimum payment trap

If you make only the minimum payment each month. It will take you longer and cost you more to clear your balance

I regard this as rather vague. It would be better if the wording was personalised and more 'In your face'. Something along the lines of;

If you only make the minimum payments on your balance of £XXXX. It will take you YY years to clear your balance and you will pay £ZZZZ in interest

Isn't that exactly the wording that does now appear?

In any case, the OP admits they weren't looking at their statements so it's academic what was on them.

redpete

OP, you can't complain about mythical small print, admit you were not opening monthly statements that clearly state the situation and ask people not to point out the obvious.

haras_nosirrah

Problem is op you can't complain they didn't tell you

they did

month in, month out for 4 years - you never opened the statements. Had you opened the statements you would have seen your balance was reducing by £5 a month and the amount of interest and capital repayment is clearly stated - you could have addressed this situation years ago

you can't complain it was hidden in the small print - it wasn't - they have told you about 50 times in very very clear writing (as each month your outstanding balance was only going down £5 a month)you made the decision not to look.

Unfortunately burying your head in the sand about your debt has cost you dearly but you can't blame the bank for that. Your credit card apr may have been hiked a few times too - you have the option to opt out of rate hikes but you have to tell them and they will not allow you to spend on the card. This would have been in a letter to you which probably wasn't opened.

You could check to see if the rate was hiked at any time and if it was and you haven't spent on the card in that time maybe see if they could back date the apr to the original one you took out (if it was hiked - worth investigating) but this would only work if you weren't spending on the card so put a debt on and left it and it would be goodwill on their part.

I know the current culture is complain and it is someone elses fault but if they are writing to you every month and you don't open the letters you can't really blame them for not telling you - they did, multiple times.

A lesson to everyone in debt who doesn't open statements. Get a cup of tea or something stronger and open the statement - then you can confront it head on

missile

Don't be hard on OP.

It is people like her who fund the credit card companies so they can be more generous to those of us who can manage our finances. :rotfl: