Direct Debit doesn’t clear the balance - I’m now in debt !

WishIwasScrooge

I have discovered that despite having a DD set up to pay off the credit card balance in full every month, I have a “stealth debt” of £2600. I only found out because I received texts telling me I’m nearing the edge of my credit limit. I am so angry. I switched to e statements but these don’t provide an obvious tally. This is a M&S card. Watch out ! 

[Deleted User]

There are no 'stealth debts'.

You're either paying in full each month or not. Time to find out.

WishIwasScrooge

Well that’s what I thought. The person on the phone said I pay on the due date every month. I asked if it would be different if I paid on another date and she said no. I am really confused as to how this can happen. I have a DD and it has worked as it should for years but it’s not now. I hunk I may have to trawl through old statements 

eskbanker

WishIwasScrooge said:

I have discovered that despite having a DD set up to pay off the credit card balance in full every month, I have a “stealth debt” of £2600. I only found out because I received texts telling me I’m nearing the edge of my credit limit. I am so angry. I switched to e statements but these don’t provide an obvious tally. This is a M&S card. Watch out ! 

Are you saying that the DD is being taken every month but for the wrong amount, or that it's not being taken at all?  What do your bank statements say?

p3ncilsharpener

It sounds like your DD is either for the minimum payment or a fixed amount.

WishIwasScrooge

eskbanker said:

WishIwasScrooge said:

I have discovered that despite having a DD set up to pay off the credit card balance in full every month, I have a “stealth debt” of £2600. I only found out because I received texts telling me I’m nearing the edge of my credit limit. I am so angry. I switched to e statements but these don’t provide an obvious tally. This is a M&S card. Watch out ! 

Are you saying that the DD is being taken every month but for the wrong amount, or that it's not being taken at all?  What do your bank statements say?

The DD goes out on the 3rd of each month. Many years ago I set it up to pay off the monthly amount. So, money is being paid every month that is more than the minimum but apparently not enough to clear the mounting debt. My online statements don’t go back far enough to be able to see when this started to go wrong. I thought it was connected to me having changed banks recently but the DD that was returned by M&S has been paid back and credited to my M&S account. I really can’t see when this started to accrue and will have to write to M&S for a full breakdown. 

I’m relieved that my understanding of how this should work is correct but am equally horrified to find myself in debt. I must have made a mistake somewhere. This is why I posted - I’m completely baffled and must sound really stupid.

eskbanker

If you'd set up a DD to settle statements in full then this should continue on an ongoing basis without intervention, so in itself that doesn't sound like your mistake, although whether you'd be able to pin it on M&S is another story.

However, electing to use online statements and then not reading any for years is obviously not a good idea!

Thrugelmir

The direct debit is collected in arrears. You'll have spend after the statement date owing. Plus the interest owed. 

[Deleted User]

You could submit a SAR (request for data they hold on you) to see when the DD changed from full to a fixed amount. A complaint to the bank might get you some compensation if it's a mistake on their part though they won't write off the debt. If the complaint gets to a deadlock, you can send to the FOS for an independent review

maisie_cat

Thrugelmir said:

The direct debit is collected in arrears. You'll have spend after the statement date owing. Plus the interest owed. 

I've had the same credit card since 1995, paid the balance in full by DD, there is always spend between statement date and direct debit and I've never paid a penny interest. 
I suspect the OP's problem is either that the balance is simply expenditure not yet invoiced or the DD has been set as a fixed amount rather than the balance.

k12479

WishIwasScrooge said:

The DD goes out on the 3rd of each month.

On the same date every month? Isn't that a bit strange, most credit card due dates change slightly from month to month. It's not perhaps a standing order rather than a DD is it?