Clydesdale Mastercard Minimum Payment Lower Than Interest

[tsugi]

I regularly get statements from Clydesdale Mastercard where the interest charged per month is higher than the minimum payment; there is a regular debit of £3, but aside from that, there is no use on the account (their pin change service has always resulted in the card not working).

 

The interest is around £10 more than the payment. Is this actually allowed?

[citizenB]

I thought that the minimum payment had to cover the interest plus something off the actual debt ?

 

I will try and find out for sure though.

[citizenB]

Hi,

 

Apparently accounts that are already open will likely see this type of thing happening.. One of the site team found the pdf below, where a consultation into this type of problem prompted change where..

 

Payments would be applied to the highest interest attracting debt first.. and the minimum payment will always cover at least interest, fees and charges, plus 1% of the principal.

 

 

Sadly, it will/does only apply to new accounts.

 

 

 

For consumers opening new accounts the minimum payment will always

cover at least interest, fees and charges, plus 1% of the principal.

 

 

This means that some minimum payments on new accounts will be higher in future

to ensure that at least 1% of the loan itself is paid off as well as the interest

and any fees and charges incurred. US based firms already have to do this in

the UK, and this agreement will level the playing field. We want to encourage

more responsible borrowing and lending in future, but have seen from the

 

consultation evidence that it could be harmful to apply this increase to existing

accounts.

 

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[MSAR]

This is one of Clydesdale banks credit card tricks to sink you into permanent debt slave. This is the third time I've read about this. Did they also:

1. Automatically raise your credit card limit?

2. Gradually increase your monthly interest rates over the years?

3. Automatically sign you up for PPI?

[citizenB]

I wonder if it might be worth closing the account and trying to come to an arrangement to repay the outstanding balance. As them to freeze interest rates and suggest that they appear to be using their repayment model as a way to keep you in debt ! Which is treating you unfairly and contrary to the Lending Code.

[MSAR]

I wonder if it might be worth closing the account and trying to come to an arrangement to repay the outstanding balance. As them to freeze interest rates and suggest that they appear to be using their repayment model as a way to keep you in debt ! Which is treating you unfairly and contrary to the Lending Code.

 

I tried that Asked about taking out a low interest loan 1.5% APR, and paying off the high interest 20% credit card debt. They wouldn't let me. Even their online banking website is advertising "gold Mastercard with 16% APR" only available to new customers. Better to see if you can find a different credit card company where the first six months are 0% interest.