"Handling fee"

nomoneytoday

The 2.5% difference at the till is because HMV (or other company) doesn't need to pay VAT on credit card bank charges...

There is also a cost to the company if you pay by cash or cheque. Securicor aren't cheap to carry cash to the bank...

Nipper78

I feel people should be able to move theyre money around from bank to bank with no or little fee always capped. Is the BT fee really in effect proportionate to the amount, in terms of it does cost the bank 1/5 more to deposit £1000, than it does £800!?

I highly doubt it at least to much extent. 0% BT also isnt 0% is it really when theres a 2% fee, its 2% BT, no getting out of it. Especially when there are totally 0% BT's out there, so rather than a % charge that charges depending on the figure unfairly, I think banks should be forced to have a straight forward % BT, and a capped charge of say £50 max for the % BT if any, simpler, clearer, fairer.

Why, because 0% BT with 2% fee just isnt 0% is it lol, its like a retailer having a big sign and offer of FREE clothes, but when you go to leave you realise theres a fee for being able to wear them, worse still some people expecting 0% / free to mean free, suddenly get some fee in the post. It's naughty and is one area I think especially in light of that comparison (retailers couldnt get away with that) needs to be clamped down on.

Mercuryrising

One thing I find really annoying nowadays is that for several cards (especially for the low rate LOB promotions) the terms and conditions say the 'may' impose a 2% balance fee, without outlining clearly when this fee would appear. What use is that to anyone and can banks legally do this?

As for the general issue of BT fees - of course we all want our cards to have none but unfortunately that era is disappearing fast. When so many people play the system of 0% transfers then what is in it for the banks?

bethyblue612

I would guess that the counter-argument will be that that as no one forces you to take a BT, the banks can in fact charge anything they like for it - they are offering a price for a service and it is your choice whether you accept it at that price or not.

As to the 2.5% on the bottom of till receipts, it is a VAT dodge by the shops and bears no relation to the fees that they are paying credit card companies.

Rafter

Should you pay £10 for a steak in a restaurant even though the incredients only cost £5?

Should you pay £200 for a flight even thought the person next to you only paid £50?

This is a charge for a service not a penalty fee!

The banks could argue that you shouldn't pay 0% interest because it costs them 5% to borrow the money.

Not sure you will get anywhere with this arguement - you cannot force a bank to lend you money at a loss!

R.

Andy_L

The_Boss wrote:

but if they are ruling that the fee is disproprtionate, then you can argue in this case it is the same.

As for the fee being a lending fee - you are not charged this percentage when you purchase stuff, so why should you be on balance transfers?

The OFT ruled that the credit card default charges for breach of contract are (generally) higher than legally fair
Press relese here: http://www.oft.gov.uk/News/Press+releases/2006/68-06.htm#note1

Since the BT is not a default charge but a charge for a service it is unaffected by this ruling.

Andy_L

The_Boss wrote:

Ok, here's my thinking.

£25 over the limit charges are ruled as disproportionate by the OFT as it only costs the bank about £10 to process all the stuff etc etc etc

So why is a handling fee on a balance transfer 2% flat. Surely it costs them the same to out the transaction through for a £1000 BT as it does for one for £4000. Therefore, isnt this charge also out of proportion?

The admin cost is the same, the nominal loss of interest to the company is, in your example, 4 times as high.

Andy_L

Nipper78 wrote:

I feel people should be able to move theyre money around from bank to bank with no or little fee always capped. Is the BT fee really in effect proportionate to the amount, in terms of it does cost the bank 1/5 more to deposit £1000, than it does £800!?

I highly doubt it at least to much extent. 0% BT also isnt 0% is it really when theres a 2% fee, its 2% BT, no getting out of it. Especially when there are totally 0% BT's out there, so rather than a % charge that charges depending on the figure unfairly, I think banks should be forced to have a straight forward % BT, and a capped charge of say £50 max for the % BT if any, simpler, clearer, fairer.

All the card i've stoozed with have had a zero or capped BT fee.

Nipper78

Rafter wrote:

Should you pay £10 for a steak in a restaurant even though the incredients only cost £5?

Yes, thats a bargain. If the steak was £80 then thats still fine of course, though they could face price fixing charges somewhere perhaps. You miss the point however, its not a pricing issue, its one of hiding charges not relative to a companies costs, in order to say somethings free, when it isnt.

A comparison would be "would it be fair for a restaurant to advertise free chips with steak, then the bill has 5% chip fee based on the overall bill?" That doesnt happen, reason being, its misleading and un-necessary, those chips aren't free, also paying a % on something like this is unfair, not overly proportionate to costs, and is merely hiding one un-necessary charge, in order to say another charge is non existent just to look good, its false and misleading.

Rafter wrote:

Should you pay £200 for a flight even thought the person next to you only paid £50?

Yes. The flights could have been booked at any time in the past year which is one of many factors that effects the airline. My mum was a stewardess, I could write you 500 lines on this if I wanted. Again, the issue is not one of pricing its of having charges un-necessarily in order to say another is non existent, to confuse, mislead, and look good.

A comparison here would be easyjet having/advertising a 0% charge on flight transers, but there's actually a 2% fee dependent on the cost of the flight. Why say 0% in the first place, and guess what, they dont. One person would pay £1, the other £300, for exactly the same thing, same costs, that was advertised as 0%. This doesnt happen. Why because its misleading and wrong.

Rafter wrote:

The banks could argue that you shouldn't pay 0% interest because it costs them 5% to borrow the money.Not sure you will get anywhere with this arguement - you cannot force a bank to lend you money at a loss!

No ones trying to, its an issue of sneaky confusing charges here which businesses are legislated not to be overly un-necessarily complicated with simply to look good. Its why Tesco's dont charge a % fee for your milk depending on the time of day. Its why when you see your petrol station banner saying "unleaded 98p" you dont then get a 5% fee on the amount of petrol used. Its why M&S can't advertise a 0% fee on exchanging goods, when there's actually a 2% fee, thats not then 0% or free, its just plain 2%, which in almost all walks of life in industry, companies are forced to be clear about. When you buy a pack of mints marked as 30p in an offer thats it, you dont get to the till and pay a 2% charge based on how many mints your buying. Its an issue of an un-necessary charge ultimately for the same thing in order to say another charge is not there, when it is just dressed up as something else.

Its about not having several un-necessary charges in order to list another type of charge as non existent, because all thats doing is hiding the charge as another thing to look good, furthermore the % charge is not overly relative to the costs incurred.

King_Of_Fools

Its is exactly the same as TalkTalk saying you can get Free* Broadband forever!

* As long as you pay £9.99 per month to subscribe to the calls package plus £10.50 per month for telephone line rental.