Virgin Card Paid Balance Off in Full but Still Owe them Money

Nursey

Last month I paid off my Virgin C/C in full. I paid off the full o/s balance, checked that the payment had reached the card and then cancelled my monthly direct debit that I had been paying towards the balance. I then received this months statement which showed that the o/s balance had been paid off, the monthly direct debit had also been credited to the account and that I was now £25.00 in credit on the card.

However, the statement also showed that I would however have interest to pay next month despite being in credit.

When I used the automated balance service it stated that I had £85.00 outstanding on the card.

When I contacted Virgin, the customer services girl could not really explain the system, admitting that she found it very confusing and difficult to understand but that although I had paid off the full outstanding balance in one lump sum payment, you have to do this for two months in a row to completely clear the balance! On top of this, they had charged me a late payment fee as my monthly direct debit payment was returned. I had cancelled it as the balance had been paid off in full!

Now I am not a stupid person and have used balance transfers to move between cards and pay off a loan early and ahead of schedule. I have even used Virgin for this before and once the balance has been paid off in full I have never before had to pay more money to clear the balance due to interest that still had to be added. I am maybe being naive but I do not think that Virgin are scamming me but for the life of me I am struggling to get my head around this one.

Can anyone explain this to me in a way that I might be able to understand?

I have criticised Virgin for sending out a completly inaccurate statement that led me to believe I was actually in credit and to be fair they have refunded the late payment fee.

YorkshireBoy

Was this at the end of a 0% deal? If so, it could be that the statement date was after the 0% expiry date, and the interest was for the period in between? Other than that, I've no other offerings, sorry.

Reaper

Once the statement has been printed saying the amount of the minimum payment which will be taken it is not unusual for credit companies to take it regardless of whether you then make any payments yourself, though the policy does vary from card to card.

You then hit the standard fee charged whenever a DD fails. At least Virgin refunded you but I generally leave my direct debit in place until I get the final statement showing my balance as zero. It means that I may end up with a positive amount on my card which needs to be refunded or balance transfered off (not if there are BT fees). Better still when paying off a card in full I often deduct the minimum amount and leave them to collect it.

As for the outstanding balance that sounds wrong. However it may be made up partly of the fee charged for the failed DD.

Hopefully next month's statement will be correct.

mrsw

Is it better to cancel the DD a coupleof months before the 0% period ends and make the last payments manually. It must be possible to legitimately cancel DDs without incurring a fee.

Twopints

Nursey wrote:

Can anyone explain this to me in a way that I might be able to understand?

I'll try. I don't think it is to do with direct debits as such. It's to do with how Virgin charge interest.

They charge you interest from the date of the transaction until the date you pay. So if you have a transaction of £5000 and settle it one month later at a monthly interest rate of 1%, they charge you £50. So you receive a statement for £5000, which you pay. Then next month you receive a statement for £50 i.e. the interest on the £5000 . This should be shown on your statement as "Transaction Interest" or similar.

Reaper

mrsw wrote:

Is it better to cancel the DD a coupleof months before the 0% period ends and make the last payments manually. It must be possible to legitimately cancel DDs without incurring a fee.

If you want to do that then ask the credit card company to stop collecting the minimum payments by direct debit. Don't just cancel the DD at your end without telling them or you will get charged.