Credit card minimum payment

dannygn123

I have a credit card where I have a direct debit set up for the minimum payment. I cleared most of it on the 24th April with a balance transfer to another card. My account is still showing minimum payment due tomorrow £104.99. I only have a balance now of around £250. I thought maybe it just hasn't updated but I called up and he said no because you have a direct debit set up then the payment will still be taken tomorrow.  It doesn't sound right to me. I would have thought if I had made a payment then I wouldn't have to make a minimum payment but he said no its calculated from your last statement balance. Can someone help me understand this I'm confused. He said you can cancel your direct debit but it probably won't be enough notice

molerat

Interim payments only usually affect full payment DDs, minimums will usually be collected if there is still a balance on the account.  You need to read your statement, what happens in the case of interim payments should be explained there.  You may be able to cancel the DD with your bank but if the CC have called it you may get a missed payment marker.  Which card is it ?

dannygn123

molerat said:

Interim payments only usually affect full payment DDs, minimums will usually be collected if there is still a balance on the account.  You need to read your statement, what happens in the case of interim payments should be explained there.  You may be able to cancel the DD with your bank but if the CC have called it you may get a missed payment marker.  Which card is it ?

It's tesco credit card. I would have thought the minimum payment amount would have reduced if the balance has reduced?

CliveOfIndia

dannygn123 said:

molerat said:

Interim payments only usually affect full payment DDs, minimums will usually be collected if there is still a balance on the account.  You need to read your statement, what happens in the case of interim payments should be explained there.  You may be able to cancel the DD with your bank but if the CC have called it you may get a missed payment marker.  Which card is it ?

It's tesco credit card. I would have thought the minimum payment amount would have reduced if the balance has reduced?

Different cards do it differently - some will adjust the minimum payment, some won't.

In addition, the amount due to be taken by DD is usually calculated (internally by their computer systems) several days in advance, then just actioned on the appropriate day.  I've no idea how far in advance Tesco in particular do their DD calculation processing, but that may also have a part to play.

Nasqueron

It depends how closed to the DD due date that the payment was made and cleared and how late Tesco can adjust their systems, paying off £104.99 of a £250 debt is no bad thing though as it'll reduce interest further

dannygn123

Nasqueron said:

It depends how closed to the DD due date that the payment was made and cleared and how late Tesco can adjust their systems, paying off £104.99 of a £250 debt is no bad thing though as it'll reduce interest further

It was paid on the 24th April and the dd is due 4th May. That should be plenty of time to allow for adjustment. Yeah it goes towards paying of my debt but just I didn't think I'd have to pay anything this month, especially not that much but I guess there's not much I can do?

eskbanker

dannygn123 said:

Nasqueron said:

It depends how closed to the DD due date that the payment was made and cleared and how late Tesco can adjust their systems, paying off £104.99 of a £250 debt is no bad thing though as it'll reduce interest further

It was paid on the 24th April and the dd is due 4th May. That should be plenty of time to allow for adjustment. Yeah it goes towards paying of my debt but just I didn't think I'd have to pay anything this month, especially not that much but I guess there's not much I can do?

The above exchange may be at cross purposes, as there are two separate issues at play here!

Firstly, there is the Tesco policy regarding automatically adjusting minimum repayment DDs - if they don't adjust them then it makes no difference how far in advance the manual repayment is, as they won't be initiating any change themselves, so it doesn't make any difference if the other payment was on the 24th, or the 14th, or the 30th.

Secondly, and separately, there is the lead time for the DD process, whereby it won't be practical to change it within n days of payment, regardless of whether that's initiated by Tesco or the cardholder.  If it's due to be paid tomorrow (presumably actually Tuesday with the long weekend) then you'd probably have needed to instruct them to change the DD by the start of this week.

Nasqueron

dannygn123 said:

Nasqueron said:

It depends how closed to the DD due date that the payment was made and cleared and how late Tesco can adjust their systems, paying off £104.99 of a £250 debt is no bad thing though as it'll reduce interest further

It was paid on the 24th April and the dd is due 4th May. That should be plenty of time to allow for adjustment. Yeah it goes towards paying of my debt but just I didn't think I'd have to pay anything this month, especially not that much but I guess there's not much I can do?

10 days isn't necessarily enough time, if the DD was already set in weeks before

You could cancel the DD and just pay the minimum manually + a bit just in case (work it manually based on their terms of minimum - 1%, 2% etc). The DD will go on the 7th though due to the bank holiday

born_again

Balance transfer will not be counted as a payment.