I have a CC I use purely for work expenses. Last month I had £500-ish on it on the statement, but checking online there was nearly as much again since the statement date a few days before payment was due, so I paid the whole lot off in one hit, waaaaay over the statement amount

This month I have £450-ish on the statement, and again, there’s nearly as much spent since the statement date.

So with an £850-ish total balance to date, and £450 at the statement date, why is the minumim payment £200??

I thought it would be, what, 5% of the balance? This is at least 20%!

I’m not bothered, as I’ll, pay it all off anyway, just wondering, like…?

Dunno PP, but I stopped using my card and managed to get 650 in credit due to standing order for minimum payment. When I transferred my own money back to the account whence it came, Visa tried to charge me 3.5% telling me they ‘categorise it as a cash payment’.

Having informed them that the world at large would consider this a simple refund, and categorise their charge as bo****ks, and a few necessary pertinent threats such as would they like me to send them an N1 by way of discussion, they cancelled the charge.

Be warned people – apparently its like getting out of the Euro – Visa say they have no mechanism for giving back money that has accrued unused on your CC account.

And yes I know my money management is third rate at best and I am a first rate numpty

Sounds like a weird CC to me, all mine are 5% (£5 minimum) afaik

the powers that be are pushing lenders into ‘responsible lending’ – ie upping the minimum monthly payment. Sounds like your bank (or whoever) is doing just this.

5% of the balance plus the interest isn’t it? What’s the APR?

Dunno about the APR, Mol, but there’s no interest at all….

My work CC has to have the balance cleared every month. It’s the rules. That why it’s interest free. If you don’t you get bummed for the interest.

Have you checked the T&C’S rather than guessing it’s 5%?

Don’t get me started on CCs. Cleared the balance on mine in a fit of pique, after they couldn’t understand why having a monthly minimum payment that was less than the monthly interest was not exactly fair. I questioned whether or not it was in fact illegal, but the penny still didn’t drop.

The system has just got it’s knickers in a twist. Used to work in the IT dept off of a card issuer and it not uncommon. I would phone them up to make sure there’s not an issue with the account though. Get it straightened out.

after they couldn’t understand why having a monthly minimum payment that was less than the monthly interest was not exactly fair

Me neither. It’s a MINIMUM payment, you can pay more. Having said that, preying on the dense isn’t really fair.

but the penny still didn’t drop

I bet it still hasn’t.

Are you allowed to handle money?

Yes, very droll.

You can’t see any problem whatsoever with a minimum monthly payment that doesn’t even cover the monthly interest accrued? Not in the slightest? Are you allowed to handle money?

The minimum payment has no relation to the interest rate.

You can pay off however much you like per month above the minimum. That’s why it’s called ‘minimum’. If you want you can pay more.

I’m trying to think of a way to explain this that will fit into your head, but to be honest I’m struggling. So I’ll leave it to molgrips

preying on the dense isn’t really fair.

preying on the dense isn’t really fair

Insults? Really? Try Googling ad hominem and see how you’re doing.

I understand what minimum means. I understand how interest works. And I’m 99% sure that I handle money more than you do by an order of magnitude or two.

I just thought in the interests of responsible lending that the fine-print disclaimer added to the bottom of your credit card statements saying that “only making the minimum repayment maximises the interest you will pay and the length of time it will take to clear your balance”, actually means that you will pay it off eventually. Clearly, with interest greater than the minimum amount, you will never pay it off. That’s not what the disclaimer says.

The minimum payment has no relation to the interest rate.

OK, how about wording it this way?

It should. The minimum payment should cover both the interest rate and an amount to pay a bit off the balance. Even if it’s just a fraction of a % of the outstanding balance, you should still be in a situation where by paying the minimum amount you aren’t actually increasing the balance on your card. I fail to see how this line of thought somehow marks me out as being dense.

I just pay the whole thing when the bill comes in
And when a new card offering 0% percent comes on the
market I order that one and kill off the other credit card.

My credit card takes the balance from my bank every month by DD. I’m to much of a knacker to pay it off in time.

pauosxo Whats a Knacker ?

It’s either a testicle, or someone who is useless. Or in my case, both.