28 Degrees Mastercard

SmashedMango on 29/05/2012 - 12:58
Last edited 29/05/2012 - 14:56 by 1 other user

Hey guys,

Looking at http://www.28degreescard.com.au/apply.html,

Minimum repayments
Your monthly payment for a statement period will be:

2.5% of the closing balance or $30 (whichever is greater), plus:

• any existing arrears carried over from your previous statement
• any amount you owe over your credit limit
• nil if your closing balance is $10 or less

Doesn't that mean that I have to pay at least $30 every month? So theoretically there's an annual fee? Can someone explain that to me?

Thanks!

Mod: Moved to Financial Forum.

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• 

  [Deactivated] on 29/05/2012 - 13:06

  +1

  NO annual fee.

  Paying off more than the minimum is paying OFF debt, or in other words paying down the loan. Which you will have to do sometime or other in your life if you do go into debt.

  Paying fees means no reduction in debt - thats what makes it a fee.

  The minimum means if you wish to leave some money not paid. Then the minimum rule kicks in AND BTW hefty interest charges.

  Pay off the balance each month and you are laughing.

  Dont pay off and you'll be crying.. well sort of.

• 

  retiredfeline on 29/05/2012 - 13:23

  +1

  Simple rule with any credit card: pay off everything you owe before the due date (give enough time for BPay transfers to happen). Otherwise it's a very expensive way to borrow money, only exceeded by loan sharks. Sadly, quite a large proportion of Australians have CC debts.

• 

  SmashedMango on 29/05/2012 - 13:54

  I am still slightly confused; say if

  (a) I get it on 1/6/2012 and do not use it at all
  (b) I get it on 1/6/2012 and spend $5 on something;

  In case (a), I do not have any repayment?
  Case (b), I have to repay $5 (and not $30, since $30 seems to be the minimum?)

  This is assuming that all is paid by due date.

  Thanks guys.

  • 

    Domingo on 29/05/2012 - 14:04

    nil if your closing balance is $10 or less

  • 

    Trojan on 29/05/2012 - 14:04

    (a) NIL
    (b) nil if your closing balance is $10 or less

    Note: I have one of these credit cards.
    There are no fees on this card and if you set up a direct debit to take out the full amount on the due date, all you will ever pay is how much you spent on the card and that's it.

  • 

    retiredfeline on 29/05/2012 - 14:07

    If you want to stay interest free pay the outstanding amount on the statement, not the minimum.

    But to answer your question, according to their rules

    2.5% of the closing balance or $30 (whichever is greater), plus:
    any existing arrears carried over from your previous statement
    any amount you owe over your credit limit
    nil if your closing balance is $10 or less

    you don't have to pay anything since it's less than $10. But they will still charge you interest on the amount owing.

    But it's interesting that the rules appear to indicate that if you owe between $10 and $30, you still have to pay $30. I would have thought just paying the amount owing would be ok. I guess the excess would be applied to next month's debt. Maybe they don't want to process a payment for less than $30. I've never been in that region though.

  • 

    [Deactivated] on 29/05/2012 - 15:25

    I have this card

    (a) I get it on 1/6/2012 and do not use it at all
    (b) I get it on 1/6/2012 and spend $5 on something;

    a. You pay nothing
    b. You pay $5 (Or leave it as its less than $10)

    If you had $35 owing you would have to pay $30 and leave $5 on the card. But that $5 would incur the 20.24% interest rate (PA rate)

    Now if you had $1500 on the card you must pay at least $37.50 which is the 2.5%

    any existing arrears carried over from your previous statement

    Now say you paid only $30 off on the $1500 you would be in arrears by $7.50 so on the next payment you must make your minimum payment and the $7.50

    any amount you owe over your credit limit

    Similarly lets say your credit limit was $1400 on the $1500 due, you would have to pay the $37.50 plus the $100 over your limit.

    nil if your closing balance is $10 or less

    As greenpossum and Trojan say, you dont have to pay the $5, it gets carried over to the next statement but you may find you get charged the interest.(I have never done this as I dont want to find out they do at 20.4%)

    Finally lets say you only spent $25 on the card. You must pay the $25. That being under the minimum $30 you must pay off and being over $10 exemption.

    Again most of this is theoretical, as you wouldn't want to leave small amounts outstanding on the card.

    As for GP's statement

    But it's interesting that the rules appear to indicate that if you owe between $10 and $30, you still have to pay $30. I would have thought just paying the amount owing would be ok. I guess the excess would be applied to next month's debt. Maybe they don't want to process a payment for less than $30. I've never been in that region though.

    I have been in this territory and all I did was pay the balance $27.32 and nothing occurred except my account went to zero

    • 

      retiredfeline on 29/05/2012 - 21:09

      Interesting.

      There is another trap. Say you for one reason or another miss the payment deadline. Next month you get charged the loan plus interest on that. Say it's $1000 loan, plus $20. So you think I'll pay $1020 off. But no, what you owe at the time you make the payment is actually $1020 plus more interest for the days since the statement went out. If you don't cover that, you are still owing them money.

      • 

        [Deactivated] on 29/05/2012 - 22:27

        I'm not 100% sure that this is the case with the 28 Degrees card. With ANZ they were/are the worse. In their case if you missed a payment, you had to clear all the purchases and charges, even those not showing on the current statement before interest would stop accruing.

        I once transposed a payment. paid $XXX.69 not $XXX.96 and apart from late payment fees ($100 I recall) I got interest charges activated on the account , and they back dated those to the date the charge was made.

        They did eventually waive the $100 fee ex gratia. But I never got caught again. I closed the account, and rest of my ANZ business. Will never trust them again with anything to do with credit.

      • 

        retiredfeline on 29/05/2012 - 22:36

        +1

        A lot of CCs have this clause where if you miss the payment deadline, you lose the interest free period and interest calculation is backdated to the date of purchase. So best not to go there.

        Also it might be better to round up your payment to the next dollar if you are in danger of dyslexia wrt the digits.

• 

  h4lcyon on 29/05/2012 - 14:36

  +1

  You only have to pay the full amount on the statement (as opposed to the total amount outstanding) to ensure that you do not pay interest, as your payments will go towards the oldest purchases first.

  BUT

  It's good practice to pay the total amount outstanding to ensure there is never any doubt about getting charged interest. And if you find you are struggling to pay the full amount either :

  a) you've not budgeted for the amount spent or
  b) you've not budgeted for the spent and you've spent too much :P

• 

  hatts on 30/05/2012 - 17:37

  In short, what you are asking about is a forced repayment and not a fee. simple.

• 

  Geewhizz on 04/06/2012 - 06:17

  BUT given that you would surely have some idea if your balance was likely to be that low, it would be a simple matter to check your card balance online prior to the statement date, and simply make a payment of that amount before that date, if you didn't want to pay a $30 minimum repayment.