Paying credit card bills - don't get caught outWhich? reveals big differences in payment cut offs
22 April 2013
Which? Money reveals why you should watch out for different cut-off times when paying your credit card bill using Faster Payments.
Paying your credit card bill after 3.30pm the day before payment is due could land you with a late-payment fee with some credit card providers, even if you use 'Faster Payments'.
Credit card faster payments deadline
If you're balancing your budget carefully, the timing of bill payments can make a big difference to your finances and you may deliberately choose to leave paying your credit card bill as late as possible.
All UK banks now send and receive money using the 'Faster Payments' system. Using this system, payments are often credited to the recipient within a matter of minutes.
But new research from Which? Money has found that credit card providers have different approaches to processing credit card repayments.
Some won't promise to complete payments on the same day if they're made in the late afternoon, even if you use the 'Faster Payments' system. Cut-off times for guaranteed payments vary significantly between providers.
Credit card providers cut-off times
The Co-operative Bank, for example, won't generally process credit card payments until the following day if they're made after 3.30pm. Capital One has a 5.30pm cut-off, and for Santander credit card customers, it's 6pm.
Several banks show that there's no need for early cut-offs. Barclaycard processes payments on the same day as long as they're made before 11:45pm, while HSBC, M&S and First Direct have a 10pm cut-off.
Same provider, different cut-offs
The Co-operative Bank was the only provider we looked at to impose different cut-off times depending on where you hold your current account.
We were surprised to find that if you're funding your Co-operative credit card from a Co-operative current account, you'll need to allow a day for this to be processed. However, if your current account is held with another bank, the payment will go through the same day, providing it's sent before 3.30pm
Late payment penalties
If you send a faster payment after the cut-off, it may not be processed until the following day, which means you could inadvertently miss your repayment date. It will then take another day before the transaction appears on your online credit statement. Missing a payment not only incurs a £12 fee, but also means you'll pay interest on the balance.
There are differences with other credit card payment methods, too. Average processing times for cheques range from as little as two days, to seven to 10 working days for John Lewis customers.
And if you're paying by debit card over the phone, this can take up to three working days with HSBS, M&S or First Direct. However, neither Santander nor the Co-operative can accept payments using this method.
Action point: Setting up a direct debit to repay the minimum amount on your credit card can help to avoid incurring charges for late payments