PayPal Credit's ridiculous Direct Debit options?

Phybersaur

I've been using PayPal Credit for a couple of years now and (until now) have never had a problem; I set up a direct debit, set it to pay the full statement balance each month, then just used it like any other credit card (for online payments).

Last month, I ordered the new Oculus headset (plus some accessories) and was offered a 2-year 0% interest payment plan with PayPal Credit. Since I'd never had any problems with them, I thought this would be a great idea; the total was £529.48, which would be split into 24 monthly payments of £22.07, which sounded perfect, so I took the offer and left my Direct Debit as it was, assuming that the full statement balance would just be £22.07 plus whatever else I'd spent that month.

A few days ago, I checked my PayPal to see how much I'd spent on regular spending last month -- £55.13 -- and double-checked my Direct Debit to make sure it was still set-up and ready to pay what I assumed would be £77.20 (regular spending plus £22.07 payment plan). However, the Direct Debit was scheduled to pay £584.61 this month: the regular spending of £55.13 plus the ENTIRE 24 month total of the monthly payment plan.

I clicked "Manage Direct Debit" to see if there was an option to set it to just pay the monthly payment (£22.07) plus the regular spending total each month, but there was not. Instead, the options were:

• The full statement balance: £584.61 (retail purchases plus all 24 months of the 24 month plan)
  
• The minimum payment amount: £27.07 (£22.07 + the normal £5 min.)
  
• Other (choose your own monthly amount)

I thought that this was a bit odd; why would the statement for this month not be calculated using the monthly payment amount that I'd agreed with them, and instead just be the complete 24 month total? In fact, on the monthly statement I'd received from them, they had clearly labelled the totals for "Retail Purchases" (£55.13) and "Promotional Purchases" (£22.07 as the Amount Due), so, if they were calculating these totals for my statement, why is there no option to just set my monthly amount to "Retail Purchases + Promotional Purchases Monthly Amount Due" (which is what I would argue is what should logically be the "Full Statement Balance" for the month)?

So I phoned them to ask if my Direct Debit could be set up in this way. It couldn't. Their suggestion is that I should set it to "Minimum payment amount" and then manually pay the difference each month to avoid interest, which seems to defeat the point of setting up a Direct Debit in the first place (since I'd have to make manual payments each month anyway). On top of this, when I did make a manual payment (I paid £55.13 so that the minimum amount would then just be the £22.07 for the monthly payment), it set my monthly direct debit scheduled payment to £0.00 for this month, implying that it takes it off of the monthly payment before the other purchases, so it wouldn't even work doing it the way they suggested!

Does anyone have any ideas how to make the Direct Debit work properly? As it stands, I think the only way to avoid having to make manual payments each month is to set it to minimum payment amount and not use PayPal Credit for any normal retail purchases?

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TL;DR: 

• I started a 24-month payment plan with PayPal Credit. I also use PayPal Credit for regular spending.
  
• If I select "Full statement balance" on the Direct Debit options, it tries to pay off all 24 months in one go along with the regular spending.
• If I select "Minimum payment amount", it pays one month of the payment plan plus £5, which doesn't cover the regular spending.
• If I select "Minimum payment amount" and try to manually pay the difference between that and the rest of the regular spending, it sets the minimum payment amount for the month to zero, meaning it's taking the payment off of the minimum payment amount first before the regular payment.
• Because of this, the Direct Debit is basically useless if I use PayPal Credit for anything other than the 24-month payment plan, since I'd have to make all payments manually anyway.
  

born_again

I clicked "Manage Direct Debit" to see if there was an option to set it to just pay the monthly payment (£22.07) plus the regular spending total each month, but there was not. Instead, the options were:

• The full statement balance: £584.61 (retail purchases plus all 24 months of the 24 month plan)
  
• The minimum payment amount: £27.07 (£22.07 + the normal £5 min.)
  
• Other (choose your own monthly amount)

Pretty much standard fare for DD's any credit card.
It is simply not realistic for them to do what you are asking.
Their answer of set to Min payment and then you top that up with what you spent is the best option.

But do not pay anything before statement date.

Phybersaur

born_again said:

It is simply not realistic for them to do what you are asking.

Why is it unrealistic for them to use the monthly payment that they set when they calculate the monthly statement balance? I think it's more unrealistic for them to consider the statement balance for the month to include all 24 months' payment, even though they 23 out of 24 of those are not due this month?

born_again said:

Their answer of set to Min payment and then you top that up with what you spent is the best option.

Except that, when I did that, it didn't work; it paid off the minimum payment first with the top-up (and subsequently set the DD minimum payment to £0.00 for the month) before taking the rest off of the retail purchases, rather than paying off the retail purchases and leaving the DD to cover the monthly minimum, meaning that, in the end, I had to pay all of this month's balance off manually anyway.

born_again said:

But do not pay anything before statement date.

I don't understand; if I leave it till the statement date (or after) then wouldn't I get charged interest on the stuff that's not getting paid because the Direct Debit isn't covering it? (It was due on 21st Nov but I've already paid the £55.13 retail plus £22.07 monthly plan manually because I don't wanna end up messing it up and being charged interest or having it show that I've missed a payment, etc.)

Thanks for your reply

born_again

You may think it's realistic. But that is not how credit systems are set up and run.

So a better idea.
Leave DD on min, once you get the statement work out the amount due that you have spent that month, add the £22.07 and pay that amount.
Various credit card co's work in different ways.
Some if you make any payment it will still take the amount you have the DD set to, others will take the amount paid into account and adjust the Min amount due.
There is no hard and fast rule. It is all down to how their systems are set up.

When I said Statement date. That is referring to when you get the statement. Not the actual date that you have to make the payment by.

PRAISETHESUN

It's pretty standard for CCs to behave in this way, and it's why it's generally advised not to mix regular spending with promotional offers. The monthly payment is simply to illustrate to you how much it will cost over the course of the offer . At the end of the day you still made a purchase for £529, which is what will be added to your statement.

You'll either need to make manual payments, or avoid making other purchases on credit whilst you carry a promotional balance and let the DD do its thing.

greensalad

Personally I'm not a fan of DD's for credit products (I know it's advisable to have them, but I am very on top of my money so it's not a problem really), I'd just set the DD to a round number that is slightly over a tenner, say £20, and then each month when the statement is drawn up manually pay what you've calculated is needed.