Nationwide credit card TV add

MrsTinks

Apparently they are changing the way it's run when you pay it off...
So instead of you paying off say any 0% balance tranfers first and then the most expensive apr's last - maximising their profit, they are now turning it round so you pay off the highest APR on the card first...

Hope that makes sense... Off to look for evidence on their website

appologies if someone has already posted this - had a quick look but couldn't see it

grumbler

You are right.
Summary:

Allocation of payments* Payments in excess of the minimum are applied to the highest interest rate bearing balances first, ahead of those that attract a lower interest rate.

BTW HSBC do the same:

Your payment is allocated to Cash Advances, Credit Card Cheques, then Purchases and standard rate Balance Transfers, and lastly to promotional rate Balance Transfers (full details are set out in Other Financial Information in the Agreement Terms).

Robert_Sterling

There is method in their madness.
If you use the money to pay of low interest money
it deters people from using the card for new purchases.

indiechickuk

sorry for being dumb, but could someone explain this? How do some purchases attract a higher rate of interest than others?

grumbler

indiechickuk wrote:

sorry for being dumb, but could someone explain this? How do some purchases attract a higher rate of interest than others?

Usually it is not different purchases that attract different interest rate, but different types of transactions: purchases, cash transactions, balance transfers ... Balance transfers can include those made under standard rate and those made under promotional (lower) rate(s). For purchases the only exception are purchases of foreign currency and travallers cheques that usually are classed as a cash transaction.

BTW, I received a letter from HSBC stating that they change the order I quoted above to the order usual for the majority of CC companies.

WOW! THIS IS MY 5000th POST :eek:

Rafter

Nationwide estimate the banks are making £500m additional profit each year from this practice!

I think HSBC and Nationwide have done a great thing here - but unless someone like the office of fair trading makes the other banks stop this practice they will probably not benefit from treating customers more fairly.

Nationwide are still charging £12 fees though - when the cost surely can't be that much.

I think they also use the trick that other card companies do where if you don't pay your balance in full, the interest is charged from the date of the purchase (ie you don't get your 50 days+ free) also any new purchases don't get any interest free period.

R.

King_Of_Fools

Rafter wrote:

I think HSBC and Nationwide have done a great thing here - but unless someone like the office of fair trading makes the other banks stop this practice they will probably not benefit from treating customers more fairly.

Sounds like HSBC are going the other way

Daft_Monkey

I think Nationwide has been doing this for years, i.e applying payments to the highest interest bearing balances first.

Arch-Angel

I phoned my CC provider (Halifax) about the Nationwide/HSBC way of paying off your CC debt. Originally I got told that "they have no plans to implement anything like this". So I pushed - saying "Why should I stay with you? Where's my incentive?"

In the end I got offered a reduction on purchases from 13.5% to 9.9%, a reduction on BT from 13.5% to 6.9% (for lifetime of the BT). Nice result there! :T I kept pushing, saying that the BT rate was that good I would use it, but, since I've got a cash withdrawal to pay for, it wasn't worth using. In reply I got a very strong hint that other customers have been phoning asking the same questions and that Halifax were considering implementing it.

I emphasise hint - it's just something that got mentioned which alerted me to the possibility. However, shouldn't all MSE's be phoning their CC providers asking them "When do you plan to distribute my payments across my BT/purchases/cash withdrawals like your competitors do?"

Start dialing folks!! And let usw all know how you get on!