Punished by providers for the sake of a 9p oversight

The credit card concept was first outlined in a novel in 1887, became a reality with fuel purchases in the US in the 1940s and fully developed by Bank of America in 1958.

Many like to pay off their credit card on a regular monthly basis, thereby incurring no interest charge. Providers quote varying credit periods by when they require such payment to be made from 46 (Co-op owned Smile) to 60 days (Metro Bank).

Imagine someone receiving a statement which shows £750.54 due and within the permitted time period pays £750.45 in error, making a small mistake in transposing the final numbers – a shortfall of 9p.

The reasonable view to take is that the missing 9p would be carried forward and paid with any new items on the next statement.

Credit card providers do not take the sensible approach. Instead they impose an interest charge on the entire amount – as if nothing had been paid off, even though most was received and credited to the client’s account within time. They take this line even if one penny is owed.

Such a fee is not nominal but at a penal rate of interest, such as 29.9 per cent (Barclaycard Initial, Capital One) or even 39.9 per cent (Vanquis Bank). Furthermore, the charging time is inconsistent between providers.

Until credit card providers apply common sense and act fairly, the only way to avoid such a problem is to pay by direct debit. The provider then applies to your account for the funds and no tiny error can be made. It’s a drastic step to have to take when providers operate inflexible rules.

Could this be an opportunity for the newly created financial enforcers – PRA and FCA – to demand a reasonable approach? The current position is hardly fair trading. The highly paid bank chief executives need to take control rather than rely on rigid IT systems.