Standing order to credit card

[puppymouse]

Can anyone advise pls...

I have read a few times on here about the standing order set up being better for clearing credit cards ie do £5 a month more than the minimum you're affording now.

I want to do this but am terrified of it not getting there in time as I find my direct debit dates can change each month a little.

Will the lender give me a date to do this for if I call them or is there a safe window of time where I definitely won't be late paying?
Thanks

Direct debit would be better than a standing order. You wouldn't miss any payments then

You can set a standing order up if you have online banking and you choose the payment date. You can change it and the amount anytime you want. It offers much more flexibility than a DD

You could have a direct debit set up for the minimum amount each month and then ste a standing order up for an extra £5 or £10 each month. It wouldn't matter then which day of the month the SO went out as the minimum would have been paid on time by DD.

I do this. Rounded up my minimum payment to the nearest 0 and changed to a standing order. You can set the date yourself. I did mine through the payments section of my credit card.

Can you have a look at past few statements and see how much the date moves by? Mine changes a bit around weekends and bank holidays but I think it is still only a window of a few days ie: somewhere between 18th-22nd of the month rather than progressively moving a day earlier/later every month. So in that example I could go for 16th of the month. I assume that is how it works for most cards?

You can pay anytime between the statement date and the due date, and if you're paying interest it's better to pay as early as possible, as you will pay slightly less interest (insert obligatory comment about balance transfer to a 0% deal if you can). There's usually at least 3 weeks between the statement and the due date.

So if your statement date is the 1st of the month and the payment date is around the 20th, set your standing order for the 10th and no matter what moves due to weekends etc, there's no risk that you'll pay early, which means that the payment doesn't count in the right statement period, or pay late and get into trouble that way.

Why don't you just up the DD amount? It doesn't have to just be the minimum. I have mine set at three times the minimum payment.

Thanks for all the advice. I will check statement date and the DD date and go for in between.

I understood by topping up the DD I'd still end up not paying off as quickly as the original DD would drop as the balance does. Just something I've read a few times on here as a good way of clearing a credit card more quickly when cash is tight? I can't afford to overpay on the minimum more than a tiny bit really.

No you can set a direct debit amount. So my minimum payment is £44 this month. My direct debit is £120. Next month the min payment will go down but my DD will be the same.

Ohhh ok so I can have a fixed amount but it's taken as DD? And do I do that from the card end or bank acc?

Thanks @lazymare I just set that up! I had no idea it was possible. I will now pay £10 more than my current minimum every month.

You just go into the direct debit settings in your credit card account online.

Oops just saw that you've done it. Good stuff. Wish I could just win the lottery to pay mine!

@BarbaraofSevillle You can pay anytime between the statement date and the due date,

Unless it is a Halifax card. They made a very peculiar change to their t&cs in Sep- basically your dd is fixed in stone once the statement is generated. Any extra payments you make will not reduce the DD and will instead roll over to the next month.

I know it's a little tangential to the op but it has big repercussions.

@ShotsFired that seems a bit unhelpful. Would have thought it would be in their interests from a regulatory perspective to allow balances to be lowered as easily as possible.

It is supremely unhelpful to consumers.

But it means Halifax can make a bit more interest, under the guise of "helping customers pay balances down sooner". It is an extraordinary change. I learned about it in summer, but it wasn't till the change happened that places like the MSE website picked up on it

(It's actually a complete PITA if you clear your balance every month, for various other reasons)

I don't understand the problem with how Halifax do things. If you know that the DD will still come out, even if you make an extra payment, you just take the amount of the DD into account when working out what you can afford to pay.

You could set up a standing order and adjust it every few months as the DD drops, or you could just make a manual faster payment when you get your statement/get paid. Hardly 'supremely unhelpful' unless very basic primary school maths is beyond your capabilities.

I can't afford to overpay on the minimum more than a tiny bit really

But the point is that you can afford the current minimum plus a tiny bit. Left to it's own devices a credit card set to take the minimum each month of 1% of the balance will take about 20 years to clear.

Set a fixed payment of today's minimum, plus even £5 or £10 and it will be gone in about 3 year and you'll pay much less interest.

One reason why credit cards got people into this sort of long term problem was the dropping of the minimum repayment. When I got my first credit card 20+ years ago, the minimum repayment was 5% of the balance, so larger, so took more off the balance.

If you were only paying the minimum, the amount of debt you were in when the minimum became unaffordable, which is often the first time that someone realises they have a problem, is a fifth of what it is with current credit cards with 1% minimums (although I think it's now 1% plus any interest and charges, but there was a point a few years ago when it was simply 1% and often the minimum wasn't even clearing the interest each month and people's credit card balances were still growing, even with no additional spending, so I think the regulators told issuers that was unacceptable and minimums had to cover the interest plus some of the balance).

So say you can afford £300 pm and the minimum payment is 5%, that's a debt of £6000, but if the minimum is 1% and you start to get into trouble when this gets to £300, that's a debt of £30k .

Thanks @BarbaraofSevillle that's exactly why I wanted to set up the payment. It's a 0% interest card for years but I want to pay it down as quickly as the amount I have spare will allow. Hence setting it up for the minimum plus £10.

Halifax have moved their T&C in love with MBNA, who already have a policy of not reducing the direct debit by the value of any additional payments. But, like MBNA, they have the caveat that if you don't make a payment that month, it will reduce the balance. In other words, if you make an additional payment, then cancel your direct debit for that month, they will take your minimum payment from the additional payment you made instead. That's the way around the situation. Certainty with MBNA, you can phone up and put a suspension on the DD to save cancelling it and reinstating it. I'm not sure about Halifax.