What happens if you only pay the minimum payment or pay more than that on credit card?

grumpy_codger

hobn_162 said:

Thanks. So when does someone get issued with a CCJ? When they don’t pay the minimum payment each month? 

CCJ = County Court Judgment. When one defaults, the lender can apply to a court, the court issues a judgement. 
IIRC, default = 3 months late

hobn_162

Thanks. So 3 months late and in terms of a ‘default’ would be if you didn’t make your minimum payment due on a credit card, and has taken you more than 3 months to pay that/late. 

Not that you haven’t been paying your balance in full for 3 months?

CliveOfIndia

hobn_162 said:

Thanks, it sounds like it wouldn’t affect me as I’ve never missed a payment on my card. Just worried about not paying it off in full recently as I used to, but I hope to be able to reinstate my direct debit to pay it off in full again in the next couple of months. 

Please stop worrying !

The bottom line is that if you're paying at least the minimum every month, you're not even transgressing the contractual T&Cs, so there's absolutely nothing at all to worry about.  You've done nothing wrong - there are plenty of folk who rarely if ever pay off their cards in full every month.  As I said earlier, not ideal from a personal finance point of view (because you could do without paying the interest), but in terms of legalities there's nothing wrong with it at all.

And, as others have said, a CCJ is the final step in a long sequence of events that would (or could, it doesn't always) happen after many many months of not paying, not engaging in dialogue, refusing to come to a compromise in the form of a repayment plan, etc. etc.

DullGreyGuy

Belenus said:
A Credit Card company cannot 'issue' a CCJ. They have to take you to the County Court and win. If that happens the County Court will issue the CCJ.

Not even that, the County Court only issues a judgement, it becomes a CCJ if a month later it remains unsatisfied. If you pay up within the month it never appears on your credit file. 

Whoever came up with the "CCJ" name was a pain and really should have come up with a better name... court judgements are fine, not paying court judgements are the problem but in the world of insurance where court judgements are not an exceptional thing a lot of customers get worried about having a CCJ and takes a long time to explain to them they won't. 

born_again

hobn_162 said:

Thank you! I’ve not missed any payments on my credit card, and up until October I had a direct debit set up where I paid the balance in full every month, but in October I started having a bit of a harder time financially so I got rid of my direct debit and now have just had manual payments on my credit card to pay it off. 

I’ve never missed a payment and have been either been paying at least the minimum, but more often more than the minimum amount, which I will do again this month (pay more than the minimum).

I have just recently read about what CCJs are and I’m a bit worried about whether this could affect me.

I presume with a credit card it would only be issued to you if you weren’t making any payments on your card at all/missing at least the minimum payments?

Set up a min DD payment. 

The worst consequence of only paying the minimum each month over 18 months would be a letter from CC about Persistent Debt & asking you to increase payments.

https://www.ukfinance.org.uk/our-expertise/cards/financial-conduct-authority-fca-rules-persistent-credit-card-debt-36-months-actions-frequently

hobn_162

Thank you. I should not be doing it for 18 months, maybe up until March or April but even then it will have been max 6-7 months, and I’ve been making more than the minimum payment each time, just not paying off it all in full - which has been my worry, but I am working to be clear of it by April and have reset my direct debit up again to make payments in full again then, is my plan. 

Nasqueron

grumpy_codger said:

hobn_162 said:

Thanks. So when does someone get issued with a CCJ? When they don’t pay the minimum payment each month? 

CCJ = County Court Judgment. When one defaults, the lender can apply to a court, the court issues a judgement. 
IIRC, default = 3 months late

A default can be issued after 3 missed contractual payments normally, though they would issue notice of default first and typically you have 30 days to pay to avoid it - not always and not impossible it could be sooner as ICO guidance is just that, not a rule.

hobn_162

Thanks; and by missed contractual payments that means not paying (at least) your minimum
Payments due/missing these? 

eskbanker

hobn_162 said:

Thanks; and by missed contractual payments that means not paying (at least) your minimum
Payments due/missing these? 

Yes, your contract with the card provider obliges you to repay at least the monthly minimum on time, so any failure to do this is a breach of contract, which can ultimately lead to sanctions from defaults through to CCJs, as above.

hobn_162

Thanks, I will continue to make more than at least the minimum payment for now while I get back to normal and then reinstate my direct debit to pay in full again each month when I can. Just really wanted to ensure that it was okay to just pay off what I can while I need to.