HELP!!!How can a bank call a purchase on a credit card a cash advance?

kev-n-sue-82

My 20 year old son has lloyds tsb gold card. He needed to pay a substantial deposit on his car insurance & paid it over the phone on his gold card. He has since been paying a substantial amount of interest on the card & because of that & being laid off from his previous job, he has regularly gone over his credit limit, even though he cut the card up 8 months ago. On checking into his account with the intention of reclaiming charges, he has been told the £1,700 car insurance deposit is being regarded as a cash advance & as such it is incurring a higher rate of interest. On speaking to lloyds tsb, he was told there was nothing they could do about it! Surely it can only be a cash advance if he had physically withdrew it either from over the bank counter, from an atm or if a credit card cheque was used? Is there anything he can do about this?

cifpower

A lot of purchases like gift cards or betting or the lottery is classed as a cash advance and charged the appropriate interest rate

chambta

Seems unfair to me. I would not have expected the transaction to be treated as cash but only way is to check their small print.

I bought my house insurance with my Lloyds Airmiles Duo card and that didn't seem to be treated any other way though it was settled in full so they never had the chance to charge interest.

TighterThanTwoCoatsOfPain

cifpower wrote: »

A lot of purchases like gift cards or betting or the lottery is classed as a cash advance and charged the appropriate interest rate

we yeah, because they are effectively "buying" cash... Your car insurance is NOT cash over any description so would challenge that in writing to the card issuers and say the balance is in dispute until resolved.

Last time i had a transaction in dispute it was removed from interest / minimum payment calculations, but was advised that should i be proved wrong, it would attracts interest and be backdated..... cant see that happened here unless there is more than being shared.

exel1966

A £1700 deposit !!!!!! So how much was the actual insurance ?

hippey

Unless for some reason the transaction is processed via third party, then it could appear as a Cash Advance. Very rare that this happens now though.

But I have seen some 'pay monthly' insurances processed like this, mainly the one's which require a credit agreement for the balance, then it should be a cash advance to the premium provider.

NickX

I always pay car insurance by Credit Card and it has never been treated as a Cash Advance. Something not right here, I would contact them and complain.

ic

Perhaps this particular company have treated it as a cash deposit against the loan. The loan itself has paid the insurance in full, and the loan company have taken the deposit from the credit card, and then monthly direct debits direct from his account. I wouldn't have expected this, but can believe it could happen.