New Day: Bye Bye Minimum Payment?

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Anthorn
Anthorn Posts: 4,362 Forumite
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The Notice Of Variation sent out to New Day (i.e. Aqua and Amazon credit cards) through messaging in their online account manager appears to do away with the Minimum Payment. There will be attention paid to what New Day calls "paying down the balance". It doesn't really affect me personally but it might affect customers who can only afford the minimum payment.

Here it is:
What happens if you are not making sufficient payments?
As responsible lenders, our aim is to ensure that you are repaying your balance within a reasonable period whilst also allowing you the flexibility to spread your repayments and better manage your finances. If you only pay the contractual minimum payment (or close to it) every month, the balance on your account will take a longer time to pay off and this will cost you more.
We might recommend an extra payment
We will look at your account regularly and if we notice that over a reasonable period of time you have not made sufficient payments to help you pay your balance down, we may recommend you make an extra payment in addition to your contractual minimum payment. This is an amount that will help you pay down your balance more quickly than if you continued with your existing repayment pattern and help you reduce the amount you are paying for credit. We will let you know how much you should pay and this recommended extra payment will be shown in your statement each month.
If we suggest that you pay a recommended extra payment, the amount of this may vary each month and we will request payment depending on how you are paying off your balance, so we may not request it every month.
You can let us know if you would prefer not to pay the recommended extra payment (see How you can contact us), but we may contact you, or ask you to contact us, to discuss your account.
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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    There's still a minimum payment.

    The NoV just says that they may encourage some customers to pay more.
  • datlex
    datlex Posts: 2,239 Forumite
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    The notice I got from them actually mentions minimum payments.
    Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    I read it as overspenders will have their cards suspended or frozen as not to get into more debt.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    This is due to new rules by the FCA so people are not in persistent debt. I think it is a good thing :)
  • dazzaofdagenham
    dazzaofdagenham Posts: 1,512 Forumite
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    Also something about booster payments.

    I do like these new features they are introducing, hopefully keeping people out of debt
  • Anthorn
    Anthorn Posts: 4,362 Forumite
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    edited 13 June 2018 at 12:10AM
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    The punchline appears at the end of the extract:
    You can let us know if you would prefer not to pay the recommended extra payment (see How you can contact us), but we may contact you, or ask you to contact us, to discuss your account.

    So for some users the minimum payment won't apply and they will have to pay more than the minimum payment. So therefore how can there possibly be a minimum when you have to pay more than that? It's the same as saying for example, "The minimum payment is £25 but the minimum payment is £50". The penalty for not doing so will probably be revealed when you "discuss your account".

    One wonders what will happen to those users who cannot afford more than the minimum payment on balances already accrued. Will they have to take the step of "difficulty in paying" included in the New Day online account manager or perhaps some other penalty such as freezing the account?
  • SnowTiger
    SnowTiger Posts: 4,459 Forumite
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    Anthorn wrote: »
    So for some users the minimum payment won't apply and they will have to pay more than the minimum payment. So therefore how can there possibly be a minimum when you have to pay more than that? It's the same as saying for example, "The minimum payment is £25 but the minimum payment is £50". The penalty for not doing so will probably be revealed when you "discuss your account".

    One wonders what will happen to those users who cannot afford more than the minimum payment on balances already accrued. Will they have to take the step of "difficulty in paying" included in the New Day online account manager or perhaps some other penalty such as freezing the account?

    It's generally a good thing, being imposed on the credit card industry by the FCA. See: https://www.fca.org.uk/news/press-releases/fca-proposes-new-rules-help-customers-persistent-debt-credit-cards.
  • redux
    redux Posts: 22,976 Forumite
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    A minimum payment might be something once in a while, but it would make a lot of sense for any account with several months in a row or in a year to be reviewed in case the holder is having difficulties.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Anthorn wrote: »

    So for some users the minimum payment won't apply and they will have to pay more than the minimum payment. So therefore how can there possibly be a minimum when you have to pay more than that?

    There is a minimum payment precisely because you DON'T have to pay more than that.

    That's why it's called a minimum payment.
  • dazzaofdagenham
    dazzaofdagenham Posts: 1,512 Forumite
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    Having a minimum payment setup can be very easy.....direct debit takes care of that.

    However as I mentioned in another thread it would be useful to have a feature like direct debit for min amount plus a certain percentage or amount.

    Which I think newday are introducing here with a booster feature
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