been done for a low usage charge??

TigerUK · 11 Sep 2008 at 20:09

I use my credit card to buy stuff from abroad and I ALWAYS pay it off immediately (or well before the interest charge hits) with my debit card.

Credit cards are a lot more secure as I dont need to have the funds in my debit card, and I'm allowed 3 chargebacks a year - if the supplier fails to deliver the goods, I can phone up the CC and let them know and they'll bounce the payment back.

Anyway, I'm worried that I might be slapped with a £35 charge for not paying much interest on my account, should I be worried?

Tiger

gumbald · 11 Sep 2008 at 20:10

Holy thread title.

What do your T&Cs say?

KNiVES · 11 Sep 2008 at 20:10

Be thankful it would only be 35 quid, some people get charges of hundreds of pound that keeps stacking, ultimately proving impossible to pay off in the end.

gumbald · 11 Sep 2008 at 20:12

I think he's asking as to if he never pays them any interest as to whether he'll get charged, as they're not making any money off him.

antijoke · 11 Sep 2008 at 20:13

Can credit companies do that?

Werewolf · 11 Sep 2008 at 20:15

gumbald said:
I think he's asking as to if he never pays them any interest as to whether he'll get charged, as they're not making any money off him.

IIRC as long as you use the card they make money off it, as they get some money from the retailers.

From what I remember Barclaycard used to charge you a tenner a year if you didn't use the card for at least £1000 worth of purchases a year (to cover their costs I suspect), but I don't know if it's still the same.

Spleenus · 11 Sep 2008 at 21:16

Werewolf said:
IIRC as long as you use the card they make money off it, as they get some money from the retailers.

From what I remember Barclaycard used to charge you a tenner a year if you didn't use the card for at least £1000 worth of purchases a year (to cover their costs I suspect), but I don't know if it's still the same.

I think that's correct as you often see those little signs saying '2.5% will be payable to blah blah and the rest the retailer however you, the customer, pays the same' so Barclaycard probably want some money off you and put it at 1% of £1k. Not sure if it's current anymore.

TigerUK · 11 Sep 2008 at 21:41

Hmm, I really need to look at the T&C I suppose. I really don't want to, I'm in danger of falling asleep..

Googled pages on low usage charge

http://news.bbc.co.uk/1/hi/business/6684683.stm

http://www.financemarkets.co.uk/2007/05/23/barclaycard-considering-low-usage-fee/

These news items are over a year old, and given that, the trend in banking has been to charge MORE, not less. I think the they're likely to penalize more (not less)

A lot of debit cards are charging monthly fees to make profits. Traditionally people didn't shop around much and were loyal to their banks, banks would give you a free bank account, in the hope that you'd be loyal and take out mortages, savings account and loans from them in future. Nowadays everyone just shops around for the cheapest rates.

It's odd though, most people would say the market forces will dictate the cheapest rates for the customer, but in practice what tends to happen is if the big banks start charging more, the smaller banks follow suit to make more profit.

So since everyone is fishing for the cheapest rates, people aren't really 'loyal' to a bank any more. So banks have no incentive to offer you a free product to catch you in their nets.

This is going to be a bad year for banks, compared to last year, so they're likely to try and squeeze out more money from it's customers.

R.O.S.S.I · 11 Sep 2008 at 21:45

Werewolf said:
IIRC as long as you use the card they make money off it, as they get some money from the retailers.

From what I remember Barclaycard used to charge you a tenner a year if you didn't use the card for at least £1000 worth of purchases a year (to cover their costs I suspect), but I don't know if it's still the same.

I signed up with Barclaycard in my first year of Uni, but I cut the card up as soon as I got it.

Just remembered it then, had it for 3 years and never had any statements or anything, probably get one letter a year with some terms and conditions in it!

I must ring them and get them to cancel it!

Vonhelmet · 11 Sep 2008 at 23:36

Spleenus said:
I think that's correct as you often see those little signs saying '2.5% will be payable to blah blah and the rest the retailer however you, the customer, pays the same' so Barclaycard probably want some money off you and put it at 1% of £1k. Not sure if it's current anymore.

That's completely different. That's a VAT fiddle. They're not really supposed to do that any more.

Steeps · 12 Sep 2008 at 00:11

CDj-Rossi said:
I signed up with Barclaycard in my first year of Uni, but I cut the card up as soon as I got it.

Just remembered it then, had it for 3 years and never had any statements or anything, probably get one letter a year with some terms and conditions in it!

I must ring them and get them to cancel it!

Oh no I have one too somewhere. Never really applied for it, just came with my student account.

Werewolf · 12 Sep 2008 at 00:22

vonhelmet said:
That's completely different. That's a VAT fiddle. They're not really supposed to do that any more.

Yup

The customer pays the same regardless of the method they use, but the shop classes a small percentage of that as a card handling fee when you pay by card, the result is they only have to pay tax on the main amount and save paying a bit of tax on the "handling fee".

IIRC it basically means they don't pay vat on that part of the charge, thus increasing their profit by a tiny amount per transaction.

BC's/card companies make the money on the transaction fee they charge the retailer for accepting the card.

TigerUK · 12 Sep 2008 at 01:06

Student accounts don't have fines (I don't think), it's a PR thing for branding. People tend to be loyal to their banks, and traditionally people would stay with the same account for life. (Ask a pensioner). Not sure if thiss till works these days though..

I remember I got a couple of late fees, and went over my overdraft limit, I just phoned them, pretended to be really upset over it, and they reversed the charge - just asking me to be more careful and aware of my balance.

Once I graduated.... it was a different issue, LOL

They used to charge up to £30 or something for a late fee, and then law passed that any bank charge over £12 needs to be justified or something, and low and behold every bank now charges £12 (right up to the limit) for late payment.

You take it for granted, until you get fined once, and then you wonder "what could I have spent that £12 on" and then you never do it again.

Glaucus · 12 Sep 2008 at 05:46

I owned several cards for years without touching them, never got charged.. Now I use it far to much..

Cupra · 12 Sep 2008 at 05:51

i use mine 2-3 times a year at the most and that will be for items from online shops i have never used before maybe £500 a year and then pay it within a week or so and i have never had any charges

aproctor · 12 Sep 2008 at 08:31

TigerUK said:
I'm allowed 3 chargebacks a year

You are legally allowed as many as needed.

philjohn · 12 Sep 2008 at 17:38

Spleenus said:
I think that's correct as you often see those little signs saying '2.5% will be payable to blah blah and the rest the retailer however you, the customer, pays the same' so Barclaycard probably want some money off you and put it at 1% of £1k. Not sure if it's current anymore.

The lions share of that goes to VISA/MasterCard/Amex IIRC.

Vonhelmet · 12 Sep 2008 at 20:05

philjohn said:
The lions share of that goes to VISA/MasterCard/Amex IIRC.

No, the card handling thing is a VAT swindle. They claim it's a handling fee as there's no VAT on that. In reality, it's part of the payment for the goods, which are VATable. It's now illegal, following a case involving Debenhams, I think, but it still goes on.