Over Limit fee's caused by interest charges

Terry_Towelling

Sleepy_G wrote: »

I really wasn’t looking for a lecture on my home budget management which, to be honest, comes across as rather patronising. That’s not to say the answers given are bad advice, simply that they are not answering the question being asked.

I was under the impression that there are rules or guidelines that prevent financial services companies from making charges where that charge was created by the passing of another charge.

I might be mistaken in this but it feels like poor practice to me.

Not a lecture, but your card T&Cs will definitely warn you about this sort of thing. Barclaycard, for example, says the following:-

Understanding the interest and fees on your account

[FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt]Please make sure you consider the interest and fees that will be added to your account at the time of producing your statement.[/FONT][/FONT]

[FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt]You should make sure you keep enough available balance to not go over your credit limit when these are added, otherwise an over credit limit fee will apply.[/FONT][/FONT][/FONT][/FONT]
[FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt]
To help you do this, an estimate of the interest that will be charged the following month is included on your statement.[/FONT][/FONT][/FONT][/FONT]

[FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt][FONT=Barclaycard Co Lt,Barclaycard Co Lt]
[/FONT][/FONT][/FONT][/FONT]

Emily_Joy

Sleepy_G wrote: »

It feels like they are adding additional fee's that are created purely by virtue of their own charge, which is a double-whammy.

I disagree. The interest is being charged due to the fact that the balance hasn't been paid in full. By no means this is "purely" due to credit card provider actions.

Nasqueron

Sleepy_G wrote: »

I really wasn’t looking for a lecture on my home budget management which, to be honest, comes across as rather patronising. That’s not to say the answers given are bad advice, simply that they are not answering the question being asked.

I was under the impression that there are rules or guidelines that prevent financial services companies from making charges where that charge was created by the passing of another charge.

I might be mistaken in this but it feels like poor practice to me.

You're still not picking up the facts here. Your over limit charge is because of the interest that is charged on your purchases, nothing to do with the charge itself. You are going over the limit because you are spending close to the limit and then not paying off in full which means they charge you interest which takes you over. The £12 and even the associated interest is not creating the charge, your financial behaviour is.


In financial hardship cases (where you are in a cycle of charges on top of charges) the bank have to help you through a process such as freezing future charges, helping you with a debt plan or even refunding a few months of charges but it is still not illegal to do it.


You have already been told the solution - pay down your card so your spending + next interest rate is less than your limit and you won't get charges.

[Deleted User]

Sleepy_G wrote: »

I really wasn’t looking for a lecture on my home budget management which, to be honest, comes across as rather patronising. That’s not to say the answers given are bad advice, simply that they are not answering the question being asked.

I was under the impression that there are rules or guidelines that prevent financial services companies from making charges where that charge was created by the passing of another charge.

I might be mistaken in this but it feels like poor practice to me.

I haven't read anything thats patronising, only people trying to give you good advice on the here and now and moving forward, you are after all free to ignore any help offered, but I won't be offering any for fear of appearing patronising.
good luck

Ergates

Sleepy_G wrote: »

I was under the impression that there are rules or guidelines that prevent financial services companies from making charges where that charge was created by the passing of another charge.

There might be rules in place to prevent a bank compounding fees - e.g. charging you a failed payment fee which then pushes you overdrawn then charging you an overdraft fee.

However, it would be very unlikely they would apply to interest charged on credit - as that isn't a fee, it's interest, it's what you signed up for.