Creditcard Introductory Cash.

I got stung by MBNA for 25 quid, having forgotten about a 3 quid balance on one of my (many) statements.

My own fault. I knew about the 25 quid late payment charge and therefore can blame no one but myself. Still smarts though - Ouch! :(

On the bright side I have 10,000 quid of their money earning interest in my bank account. LOL!

Should be able to buy an XBOX or Playstation to alleviate the pain at the end of the interest free period :)

I know its too late but the best thing to do is to set up direct debit to pay the minimum balance each month. Luckily i have yet to miss a payment but thats how they make their money.

Pardon me for being slow here, but how does paying early incur a late payment fee?

It happens if you pay before the next statement. Some cards have some variation in their statements (for weekends/shorter months?)

for example my statement usually comes out around the 3rd, but can be as late as the 5th. If I made a payment on the 4th it would be credited to the previous month, and if I was running an outstanding balance they would still expect a minimum payment at least between the 5th and the 3rd of the next month.

It doesn't really tie in with the OP's assertion that he pays in full every month however. If he paid in full he wouldn't know how much to pay until his statement arrived, unless he added up all his vouchers and paid the exact amount. If he did this he then wouldn't need a payment the next month, as the balance would have been cleared.

James

A "late payment" charge of 25 on a balance of 3 seems like a penalty, and probably not legally enforceable. It might be difficult for the CC to argue that the 25 is a reasonable estimation of its "loss".

However, you run the risk of the CC closing your account.

But it does raise an interesting question as to how an additional payment within the same month should be treated. The CC company may credit it to the account immediately, but how could they challenge it if you claimed it was intended to be the following month's which you had mailed early to make sure it arrived on time?

I don't think they would accept that. You get your statement and then usually have between 14 and 28 days to make a payment. I think you would have to be pretty paranoid about the post to send the money before the statement actually arrives. I also think double payments in a month would be fairly common. If someone was making a real effort to pay off debt and didn't trust themselves with spare cash they could stick any spare money into their credit card at any point in the month.

I have known people to be concerned about credit card payments when going on holiday- send it before you go and it hits the previous month and doesn't count- send it after you return and risk incurring a penalty.

James

I have got to agree.

When i used to pay credit cards through the post you had to detach a slip from the statement and send it with the cheque. I bet the OP did not make it clear to the credit card company when he forwarded his cheque that the payment was for the December period.

In message , Jane Tweedynn writes

I dont reckon the creditcardcos have a mechanism to cover such an eventuality, in fact on looking at a credit agreement, the amount which is due only becomes due after the definitive statement is issued so the concept appears to be specifically excluded.

You're probably right, but it does seem a little odd that making a payment a couple of days *early* could result in you being hit with a £20 *late* penalty charge.

"Chris Blunt" wrote

Ah, but it wouldn't be only a *couple of days* early - it would need to be

For instance, payment made (early) on 1st of month, statement date (say) 3rd of month, but payment not due until 29th of month - so the payment on 1st would have actually been 28 days early...

The background behind the problem, was that some of the card charges were buisness related, but I stuck them on my card. I knew precisly how much they were, and as soon as my employer paid me, I payed it straight off the card (so I did not have money that was "accounted for" in my current account). This was the fatal flaw in my plan. My "egerness" to pay the money as soon as I got it resulted in the late payment charge.

Anyhow, I have since signed up for an Egg card, and so far they seem very efficient. I applied online on Boxing Day, the form arrived, been signed, sent back, and my card has been dispatched, all in a week, over Christmas period. Very Impressive....

Slightly tangentially, I have a Tesco (RBS) card which I got for a 0% introductory offer which has now expired, and hence I've been running it down, but it still has a minimum DD set up. My last statement shows a £5.55 opening balance, a £5 DD and then "small balance write off" for the other 55p clearing it down to zero - i.e. they seem to have effectively charged me -11% interest! Not a huge amount, but it still suprised me, I don't think I've seen anything similar before (but then I usually have a full DD set up). I guess I should try spending just over £5 every other month ...