Delay RBOS payment for ever at no cost

nigelwilliamson

I noticed this by accident when my wife's card was charged and then immediately refunded for a transaction.

The bank considered the refund a 'payment' which contributed to the outstanding balance of the previous month, reducing the payment taken this month.

So, even though both the transaction and refund happened this month, we did not have to pay the full balance for the previous month, and NO INTEREST was charged.

It, therefore, struck me that if you can orchestrate putting through a large transaction and refund (ideally for the value of your previous months statement) you could put off paying your bill by a month. Repeat the process each month and you need never pay!

We have not tried doing this so there may be a catch somewhere - but I can't see one.

MattLG

Sounds like a neat trick if it works :-)

MattLG

Margaret_Millne

Would this not snowball out of control if not careful.

i.e. Month 1 you owe £100

Put through a purchase and refund of £100, you may not pay any interest but you still owe £100.

Month 2 you make purchases totalling £100, so you now owe £200. You have to put through a purchase of £200 and refund of £200 to pay no interest.

If you keep on spending, then you will have to put through an ever increasing purchase and refund to avoid paying any interest, and as you are not really paying off any debt it just keeps on increasing.

Sounds like a policy for potential disaster - or am I missing something here?

TREVORCOLMAN

Sounds a bit too good to be true, and will they not notice it?

What does Martin think?

;D

JohalaReewi

It is fine while the debt (ie the total amount actually spent) is small and you can find somewhere to 'buy and refund' but as MM said, eventually the debt will build up and you will be unable to 'purchase' your previous month's debt due to credit limit.

nigelwilliamson

Valid point about the debt build up, although it would only build up by the amount you spend. So you would have to be disciplined (e.g. keep the money to pay off the debt in an interest paying account) and keep the debt below your credit limit. 

It might be more useful for use once in a while if a monthly bill looks too large to handle you can get an extra month interest free. Also, whoever pointed out that finding the retailer might be a problem is right - another reason to only use it once in a while?

Regarding them noticing it, I guess they could but as it is their policy that creates the loophole I don't know what they would do about it.

Having said that I won't be doing it personally as it sounds like a bit too much effort - but thought it worth mentioning anyway...

Cheers

Milarky

Surely as long as no 'net' purchases are made then you can continue indefinitely with this?

Month 1: £100 [purchase] Statement £100
Month 2: purchase £100 item & get refund on said item. Statement £100 [purchase from Month 1 only]
Month 3: purchase £100 item & get refund on said item. Statement £100 [purchase from Month 1 only]
...
..
.

As you can see, the original balance can be kept outstanding as long as no new 'net' purchases are being made. This suggests you can keep up to half your credit limit - in purchases - unpaid by this method.

MSE_Martin

I think it's a tricky system. I'm surprised they count a refund as a purchase - it may be to do with the specific retailer

Also it's always worth remembering credit card companies can 'call in the debt' whenever they choose - and this is often triggered by an obvious account abuse.

I'd be very careful

martin

Lopo

....zzzZZZ!

Bit of a no brainer this. More hassle than its worth IMHO and as also mentioned before - but ok as an infrequent one off. May be wise just as a one of quick emergency fix for a month, but not wise to repeat routinely as you would eventually run out of retailers to approach in your area and they would think little of you after a while doing you no favours....

Your probably doing more damage to the retailer also which means possibly putting individuals out of pocket if they are sales/comission driven. Not nice. Is it worth the journey each time trekking down to the shops to pull it off !?

Its hardly money saving to put it into a real context so why really bother ? Think your CC provider would eventually get peeved aswell and a debt is a debt at the end of the day which you will always have there lingering.

By the way, not *all* cards treat refunds as repayments. So wise up if you think buying/refunding is clever.

Go ahead, flame my day....

Lopo

ashcarrot

What could have happened is the retailer didn't put it through as a refund im not quite sure how it works but if it go paid as a normal payment maybe this would have caused this?

JohalaReewi

Which reminds me. If you are going to try this, do it in sterling!! I long time ago, I purchased an item in the USA. The retailer rang up the wrong amount on the Visa and put through a credit to cancel it out, then did another transaction for the correct amount (all in USD). No problems so far but when the statement arrived. The USD debit and credit which cancelled each other out had been converted to different sterling amounts and I was over £2 down on the deal.