Credit Card Payments?

A mate of mine was hoping I could tell him why is payment went up the following month when he paid over and above the min Payment. He showed me two statements. Statement 1 was a min payment of £110.00 he paid £220.00 yet his next statement went up £10.00.

Statement 2 (last month) the min. was £107.00 he paid £187.00 yet his next payment is £117.00.

I thought I was good at maths, but this has got me. Any ideas please.

NOTE - No purchases were made between payments.

Although you say there were no purchases, is it possible that an earlier charge has just come through?

Have they come to the end of a 0% period? Interest charges could have risen?

Have fees risen?

Are fees only applied once a year and it is this month?

It would be so simple just to call the card issuer and ask.

The min payment is just that the min payment not to default on a payment , it does not mean you are going to reduce the amount owed. For example

Amount owed £ 2000

Min payment required £ 100

Actual Amount Paid £ 200

Amount owed £ 1800

Interest charged £ 300

New amount owed £ 2100

So even if you pay more than the minimum payment the amount owed can still go up and so will the minimum payment .

Credit card companies love people who only pay the min payment or less than the interest charged as they will never pay the bill off .

Minimum Payment must include interest, so that does not apply.

Have they withdrawn any money on the card? that can really stuff the charges up.

This is why some people shouldn't be allowed credit cards. As it was demonstrated earlier just paying the minimum amount does not necessarily mean that the overall debt decreases.

This is why some people shouldn't be allowed credit cards. As it was demonstrated earlier just paying the minimum amount does not necessarily mean that the overall debt decreases.

By law, the minimum payment has to include interest, charges and fees plus at least 1% of the outstanding balance.

If there are no new purchases and charges, fees and interest rates have not changed, the outstanding balance should fall.

Edit:

I now realise that this regulation is only obligatory on new accounts since 2011.

Whilst most issuers have applied it to all accounts, it is possible that the OPs card balance is still increasing.

As I can see, based on the statments I've seen for every £100.00 he pays, 80/90% is intrest. The total amount owed is reduced by the extra payment + on the following statement, yet the payment goes up, on the statement after this one the payment does down to what he had expected it to be a month earlier. He has phoned the Co. but could not understand what he was told. deliberately confusing he says.

Isn't it law that any intrest rate incease must be preceded by notification? he has not been informed of any intrest rate increase.

Because the minimum payment includes a token payment off the total amount owed, plus all intrest and charges one would exppect payments to go down every month (unless he used the card). Which is what happens - unless he makes an overpayment then the following payment goes up, then drops on the next statement.

May we ask ... Who is the card issuer?

How is payment being made? If Direct Debits are involved some cards vary how they deal with 'more than the minimum'.

This is why some people shouldn't be allowed credit cards. As it was demonstrated earlier just paying the minimum amount does not necessarily mean that the overall debt decreases.

I created a spreadsheet for every month and each time I use my card put it in so every month I can check what is on the bill is on my spreadsheet. I always pay it off, it could be different if not paying all the amount off every month as unless knowing the interest being charged the spreadsheet wouldn't be accurate but would help keep track

This is why some people shouldn't be allowed credit cards. As it was demonstrated earlier just paying the minimum amount does not necessarily mean that the overall debt decreases.

Some people aren't allowed credit cards. It's for the credit card company to determine which applicants it wishes to extend credit to.

As I can see, based on the statments I've seen for every £100.00 he pays, 80/90% is intrest. The total amount owed is reduced by the extra payment + on the following statement, yet the payment goes up, on the statement after this one the payment does down to what he had expected it to be a month earlier. He has phoned the Co. but could not understand what he was told. deliberately confusing he says.

Isn't it law that any intrest rate incease must be preceded by notification? he has not been informed of any intrest rate increase.

Because the minimum payment includes a token payment off the total amount owed, plus all intrest and charges one would exppect payments to go down every month (unless he used the card). Which is what happens - unless he makes an overpayment then the following payment goes up, then drops on the next statement.

Could it be that the minimum charge depends on the length of the month, probably the preceding month, Feb will be cheaper as there are less days for interest to accrue, etc...