Capital One changes T&C's.... could this be to avoid Compound Interest Claims?

[Legal Beagles]

From October 1st 2008 Capital One have made changes to their credit card's Terms and Conditions in their credit agreements.

Our source believes this is to be an attempt to avoid future claims for compound contractual interest which Claimants may request when filing claims for the return of unlawful default charges.

The new Terms and Conditions include a new paragraph;

If you incur a default charge (see Key Information - Default Charges below) on or after 1st October 2008 then interest will be calculated from the 29th day after you have been given a Notice of Default Sums until repayment. Any interest payable on the outstanding amount will be calculated at 30.34% p.a. (variable). Interest on default charges will be calculated on a simple basis.

Interest for purchases, balance transfers and cash advances will continue to be calculated by Capital One using the normal compounded daily interest method.

When you make payments to your credit card balance, the default charges and applied interest are paid off before any remaining balance is applied to purchases, balance transfers or cash advances, so overall the change has negligible effect to Capital Ones interest earnings on default charges.

[michael]

Re: Capital One changes T&C's.... could this be to avoid Compound Interest Claims?

Marbles are also changing theirs:

Interest on Default Charges

From 1 October 2008 we will not charge interest on default Charges paid by you. The following wording will be added to 'Annual Interest Rates' under 'Other Financial Information in your agreement:

"However we will not charge interest on Default Charges from 1 October 2008 or any Transaction or any instore Transaction shown on your current statment if you pay the full Statement Balance shown on your current statement by the required payment date"

The wording 'Default Charges' will be deleted from clause 3(c) in your Card Conditions of Use

[Tools]

Re: Capital One changes T&C's.... could this be to avoid Compound Interest Claims?

Similarly with Barclaycard which also applies for Monument and Goldfish

CHARGING INTEREST
We will not charge interest on purchases added to your Standard Balance since your last statement if you pay your current statement balance in full by your payment due date. If you do not do so, we will charge interest on the amount of each purchase from the date of purchase until the balance is repaid in full. This may result in an interest charge appearing on your next statement even though you have paid your balance in full. We will not charge interest onon a Default Charge for 28 days starting from the datethat we give you notice that the default charge has been charged to your account. We always charge interest on other amounts from the date they are added to your account even if you repay the balance in full by the payment due date. We add all interest to your account on the date of your statement each month. This means that you will generally pay interest on interest. However, we will only charge simple interest on Default Charges. Interest is calculated on a daily basis. If any interest is payable on your account we will charge a minimum of £1.00

Also the Allocation Of Payments now states

If you do not pay the outstanding balance in full by the payment due date, we will apply the amount you do pay to reduce what you owe us in the following order

• Default Charges
• Promotional Balances. This includes interest and fees on promotional balances
• Any other interest charges and other charges made under this agreement
• The Standard Balance
• The Cash Balance

[simple1212]

Re: Capital One changes T&C's.... could this be to avoid Compound Interest Claims?

The terms and conditions of this really not good..

Simple interest calculator calculation rates mortgage compound high interest savings account