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I'm new to credit cards and wish to understand how the following scenario will play out.

  1. Initial balance £0

  2. September 6th to October 5th I run up £1000 on the card. Statement arrives for £1000 to be debited as per my direct debit on the 3rd of November.

  3. Between October 5th to 15th I run up £500 and on the 16th of October I manually make an early payment of £300. The direct debit amount remains as the statemented £1000 and my card balance reads 1200.

Is the £300 I have paid early contributed towards the £1000 statement payment? In other words, if I adjust my direct debit to £700 to go out on the 3rd of November, will I have fully paid off the card for 6th September to 5th Oct? Or will I have only paid 700 of the statemented £1000 and the early payment of £300 has contributed towards the reduction of the future statement? Will I pay interest in this scenario?

I'm in the UK and my bank is Barclays for reference.

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    Puzzled re: where you talk of adjusting the direct debit amount. Doesn’t the credit card provider (is this also Barclays?) take the direct debit – if so how would you adjust it? Do you mean standing order, which you control? Asking because in my experience the Direct Debit is usually set to one of two amounts: either the balance in full, or the min. payment. Unless Barclays does it differently? – marktristan Oct 19 '17 at 17:05
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    As far as I can see I can amend the direct debit amount to either the min amount, a specificed amount, or the statement amount, as much as I want. – Phil Oct 19 '17 at 18:00
  • thanks for clarifying. My credit card providers have never yet been quite so flexible. – marktristan Oct 19 '17 at 19:49
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Yes, the 300 is applied to the 1000 due.

You have to pay 700 more for the month.

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    What is the source of your information? Can you add more detail to explain how you believe this to be the correct answer? – marktristan Oct 19 '17 at 17:12
  • Pretty sure this is a legal requirement in the US (possibly unless the consumer specifies otherwise), no idea if the UK has such a law. – Kevin Oct 19 '17 at 19:01
  • @marktristan If this were NOT true (meaning that payments were applied to current charges first), then the only way to pay off the prior statement balance would be to pay the prior balance amount PLUS any charges made since that time. I don't know of there's a legal explanation for this but common sense tells you that any payments get applied to the prior statement balance first. – D Stanley Oct 19 '17 at 19:21
  • Common sense tells you nothing. The credit card Ts and Cs tell you exactly what order partial payments are applied to transactions (for example cash advances, purchases, etc.) – Vicky Oct 19 '17 at 20:58
  • @Vicky wouldn't the laws about interest-free grace periods effectively mandate it? – GS - Apologise to Monica Oct 19 '17 at 21:55

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