credit card repayments

curehead

not sure if thhis is the right place to post but.
what happens if you miss a credit card repayment i owe 2000 on card the repayment is 5% so 100 euro but my account is empty .
do they just charge you a fine until next month ?
i do pay one of those payment protection thingys but i'm not sure hiow that works either ?
i'd like to keep the card but i just cant afford this months bill i just back from holidays and skint plus got an unexpected bill (another story )


thanks in advance for any replies
curehead

Firetrap

If you miss this month's payment, they'll lump on the interest to next month's balance.

It's a bad idea to miss a payment though. You run the risk of it damaging your credit rating. When you go look for a loan/mortgage, the lender checks your credit record with the Irish Credit Bureau. They hold onto all records pertaining to you for five years. More here

Carrigart Exile

curehead wrote: »

not sure if thhis is the right place to post but.
what happens if you miss a credit card repayment i owe 2000 on card the repayment is 5% so 100 euro but my account is empty .
do they just charge you a fine until next month ?
i do pay one of those payment protection thingys but i'm not sure hiow that works either ?
i'd like to keep the card but i just cant afford this months bill i just back from holidays and skint plus got an unexpected bill (another story )


thanks in advance for any replies
curehead

you will be fined and this added to your next month's bill. Keep doing it tho' and they will first reduce your limit to your current balance then cancel your card

curehead

it will be just my first time missing a payment in the three years ive had the card' will definetely be paying the next time i was just wondering how strict they get like if you went for a loan or anything like that in the future .
(damn those bankers)

Toots

It depends on who your credit card is with. Some will charge you a penalty for missing your payment, ie MBNA. Others won't. If you have a direct debit on your account and your account is empty when they go to take the direct debit one of two things will happen: the direct debit will bounce and you will be charged an 'unpaid fee' which varies from between roughly 7E and 20E depending on your bank. Or the direct debit will be paid which will result in your account going overdrawn, and if you don't have an overdraft you will be paying interest of about 14%apr until you put your account back into credit again. This amount is also dependant on your bank, and the charge will be applied to your account at the end of the current fee quarter. (June I think)

Payment protection wouldn't be my area of expertise, but AFAIK, the premium for the year is added to your bill when you take out your credit card and again on the anniversary each year, so you just pay it out of your bill as if it were a purchase. I could be wrong on this though.

If you want to keep your card but can't pay it off for a little while, it might be worth taking out a small loan to clear the balance. The rate of interest on credit cards can be anything from 9.5% to 17%, so they're a very expensive way to borrow money. Compare that with a loan of 2k which would be a lower rate, more likely 8% or lower, which you could use to clear the balance of the credit card and there would be less pressure to pay off a big chunk of money all at once. Then if you came into funds again, you could always repay the loan early. If you go for a variable rate there shouldn't be any penalties for early repayment.

Hope this helps!

Collie D

What they said.

Payment protection is only in cases of illness/redundancy/etc. where you aren't bringing in a wage and can't afford to pay the bill. Although, the f*ckers will make you jump through hoops to claim this insurance.

Nevyn

You'll prolly get a better answer in the personal section of biz.

http://www.boards.ie/vbulletin/forumdisplay.php?f=857

curehead

just chexck my account online and yes its gone minus 107.50 which was the exaxt amount so i will be charged for not [paying the direct debit ) ?
and not the extra interest ? or both

Toots

Collie D wrote: »

What they said.

Payment protection is only in cases of illness/redundancy/etc. where you aren't bringing in a wage and can't afford to pay the bill. Although, the f*ckers will make you jump through hoops to claim this insurance.

True. if you actually read the T&Cs for it, there's basically feck all they'll pay out for.

LegacyUser

I have a student credit card with AIB. I have missed repayments before, and was in contact with my bank. I got the feeling that the bank (in my case) was more understanding because I rang them ahead of the payment date and warned them that I was short due to cash flow issues.

I do not know if there is a reason for this, but I would recommend you ring your bank and let them know.

Toots

curehead wrote: »

just chexck my account online and yes its gone minus 107.50 which was the exaxt amount so i will be charged for not [paying the direct debit ) ?
and not the extra interest ? or both

You'll be charged interest for going overdrawn 'without permission' ie without a sanctioned overdraft. You won't be charged for not paying the DD, as it seems to have gone through. Have you got online banking so you could check your transactions and see exactly what went through?

curehead

yeah checked online and overdrawn but no penalty attached yet i'm sure that will come later though :-(

Toots

You might not get a 'penalty' for going overdrawn. If any other transactions hit your account, they might start charging tho. The way they work it is, if you go overdrawn, you pay interest on the amount your account is overdrawn by.

So lets say your account was 100 overdrawn for 10 days, and the rate was 12%APR, it would be like you took a loan of 100 over 10 days at that rate, so the amount of interest you would be charged would be 32c roughly. (100 x 12% divided by 365 x 10) so the actual interest wouldn't be huge on the amount you're overdrawn by.

However, you're not supposed to go overdrawn unless you have an overdraft, so this could affect your credit rating. If you won't have funds to lodge to your account to clear off the overdrawn balance, you could ring your bank and ask for a temporary overdraft of say 150. You'd still pay interest on what you're overdrawn by, and there's an anual fee for having an overdraft, but it will be permitted by your bank, so technically you're keeping your account 'in order' whereas now you've got what would be referred to as an 'excess' and if you have these frequently it can have a negative effect down the line if you're looking for loans or a mortgage.

stepbar

curehead wrote: »

it will be just my first time missing a payment in the three years ive had the card' will definetely be paying the next time i was just wondering how strict they get like if you went for a loan or anything like that in the future .
(damn those bankers)

It's not the banks fault that you can't manage your finances :rolleyes:

Thomas_S_Hunterson

ccproblems wrote: »

I have a student credit card with AIB. I have missed repayments before, and was in contact with my bank. I got the feeling that the bank (in my case) was more understanding because I rang them ahead of the payment date and warned them that I was short due to cash flow issues.

They do seem to give students a certain amount of leeway, because as long as they keep you sweet while you're young, it's almost certain that they've got a customer for life.

Toots

Sean_K wrote: »

They do seem to give students a certain amount of leeway, because as long as they keep you sweet while you're young, it's almost certain that they've got a customer for life.

He he! That's certainly true, although ringing them ahead of time can never hurt really. Also you find with the students a lot of the time the parents just bail them out anyway so they're not such a big risk.

stepbar

Sean_K wrote: »

They do seem to give students a certain amount of leeway, because as long as they keep you sweet while you're young, it's almost certain that they've got a customer for life.

Deffo, I'm with AIB & BOI. Mostly with AIB. During my student days with AIB I was right up to my goolies in debt. About 1.6k on a c/c and 600 eur on a overdraft. However I never missed a payment etc and I'm still a happy (enough) customer. Now as a bank lender, I'd never begruge a student a loan having being one and knowing that research states that students are one of the best segment groups for paying back debt etc.

Gordon

Moved from PI.

stepbar

Thanks Gordon.

Payment protection only works if you are made unemployed, disabled / illness or on death. It won't cover you if you simply can't pay the bill. Depending on your account grade, AIB may decide to pay the bill from your a/c. Typically credit cards from the same bank must be paid and so it could be paid anyway. But you will be liable for any charges etc arising from overdrawing your account.

Toots

stepbar wrote: »

Thanks Gordon.

Payment protection only works if you are made unemployed, disabled / illness or on death. It won't cover you if you simply can't pay the bill. Depending on your account grade, AIB may decide to pay the bill from your a/c. Typically credit cards from the same bank must be paid and so it could be paid anyway. But you will be liable for any charges etc arising from overdrawing your account.

Depends on the state of the current account. If the account is all over the shop with unpaids and constant overdrawing, they'll start returning DDs and standing orders, even if they're for their own loans or credit cards. The customer will have usually been contacted several times regarding the operation of their account at this stage though. Generally they'll give you the benefit of the doubt if it's the first or second time it has happened. It's not something you'd want to make a habit of though.

stepbar

Toots85 wrote: »

Depends on the state of the current account. If the account is all over the shop with unpaids and constant overdrawing, they'll start returning DDs and standing orders, even if they're for their own loans or credit cards. The customer will have usually been contacted several times regarding the operation of their account at this stage though. Generally they'll give you the benefit of the doubt if it's the first or second time it has happened. It's not something you'd want to make a habit of though.

I know it happens with Business a/c's. Well with my bank anyhow. Defo not something you would want to be making a habit of.

Firetrap

In the short term, the best thing you can do is pick up the phone and ring your bank. Explain to them what's happened and see if they'll give you an overdraft (if you've got that sort of account) or at least agree to pay out the money based on the promise that you'll have money back in the account very soon. Depending on where you have your account, they can be helpful/unhelpful. I know years ago I had a payment due on my car loan and it was going to be a couple of days before I got paid and there wasn't enough in my account. I rang up my bank and explained to them and they allowed the money to go through.

I agree with Toots85 - you might be better off getting a loan from the bank/credit union to clear your credit card debt. It's much easier to pay off a loan than a big credit card balance. With the credit card, it's a bit like yer man who used to push the big rock up the hill, only to have it roll back down. The payment protection and the hefty interest reduce what's actually going against your balance each month.