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Minimum payment

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I owe £12000 on my Halifax CC at an interest rate of 22.45APR. The interest is over £200 every month and I pay £450 off it (the max I can afford) but the interest and minimum payment seem to increase every month, can that be right? I called the Halifax and they simply didn't care, no advice except to increase my payments and no explanation for all this.
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  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Are you continuing to spend on the card?
  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    And is the £450 you are paying more than the minimum requested?
  • eskbanker
    eskbanker Posts: 37,017 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If you're not spending on the card at the same time and assuming the interest rate hasn't changed, then obviously paying £250 off the balance every month will reduce both the balance and the subsequent months' interest.

    Perhaps you could post some figures from the past two or three months' statements, showing starting and closing balances, any spend, interest charged, any other charges, etc?
  • molerat
    molerat Posts: 34,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 18 June 2018 at 12:51PM
    Halifax minimum payment is interest + charges + 1% of balance so the capital amount should be decreasing unless the card is still being used.
  • I'm paying over double the minimum payment and haven't used the card in over a year,the interest I'm paying is over £200 and rises every month. I asked Halifax if I could have a loan to pay it off and then close the account immediately,but, they refused and even sent me messages for balance transfers. I cut the card up long ago, so if they hope i'll use it again then they are mistaken. The balance is going down, but, not as quickly as I would hope when the amount of interest added increases, it was £211 last month and £216 this month. I would have thought as the balance is decreasing so would the interest.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    A small increase like that is likely to be down to days in the month.
  • molerat
    molerat Posts: 34,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Interest is charged daily so the number of days between statements affects the amount of interest. With that sort of balance and interest rate 2 days difference in statement period lengths will make the type of difference you have seen. You can make a small difference by paying the bill as soon after the statement is produced as possible.
  • forgotmyname
    forgotmyname Posts: 32,918 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    If your paying £450, going by the figures in post #5 your minimum payment would be around £348.

    Paying £450 for the next 3 years and without adding another penny to the card should clear it, but you will pay over £4000 in interest.

    If you made the minimum payment it would take 26 years and add £19,000 in interest.

    Start throwing more money at it if you can, even if its pennies. Every 50p could save you £6.
    Censorship Reigns Supreme in Troll City...

  • fewcloudy
    fewcloudy Posts: 617 Forumite
    Part of the Furniture 500 Posts Photogenic Name Dropper
    JacksMom wrote: »
    I'm paying over double the minimum payment and haven't used the card in over a year,the interest I'm paying is over £200 and rises every month. I asked Halifax if I could have a loan to pay it off and then close the account immediately,but, they refused and even sent me messages for balance transfers. I cut the card up long ago, so if they hope i'll use it again then they are mistaken. The balance is going down, but, not as quickly as I would hope when the amount of interest added increases, it was £211 last month and £216 this month. I would have thought as the balance is decreasing so would the interest.


    Have you tried to get a 0% balance transfer card? Maybe not possible to transfer the whole amount onto it, but anything is better than nothing. You still wouldn't have to use it/could cut it up etc, it's just that you wouldn't pay any interest on it, which would allow you to reduce the balance quicker.
    Feb 2008, 20year lifetime tracker with "Sproggit and Sylvester"... 0.14% + base for 2 years, then 0.99% + base for life of mortgage...base was 5.5% in 2008...but not for long. Credit to my mortgage broker
  • Anthorn
    Anthorn Posts: 4,362 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    JacksMom wrote: »
    I owe £12000 on my Halifax CC at an interest rate of 22.45APR. The interest is over £200 every month and I pay £450 off it (the max I can afford) but the interest and minimum payment seem to increase every month, can that be right? I called the Halifax and they simply didn't care, no advice except to increase my payments and no explanation for all this.

    The light at the end of the tunnel could be in September 2018 when new FCA rules are enforced where if you have been in extended debt for 36 months the lender could remove or reduce the interest. Extended debt is where over the period you have paid more in interest than you paid off the debt.
    Once a consumer has been in persistent debt for 36 months, their provider will have to offer them a way to repay their balance in a reasonable period. If they are unable to repay the firm must show the customer forbearance. This may include reducing, waiving or cancelling any interest, fees or charges.
    https://www.fca.org.uk/news/press-releases/new-credit-card-rules-introduced-fca

    As far as I can see the logical conclusion could be that customers who are paying more than the minimum will reduce their payment in the hope that their debt will be judged to be persistent debt. However the response of lenders with regard to the credit history is unclear: Could be that persistent debt is a black mark against future credit.
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