Amazon Mastercard Interest Charged on recent Purchases

PAMDILL

I took out an Amazon Mastercard last December when they were offering interest free credit on purchases with Amazon during December. The card is offered through Bank of America (MBNA Europe).

I spent just over £110 on it. I did not receive the first ever statement until 12 days after the first payment was due. Even though I paid through my online banking immediately I incurred a default charge and interest for defaulting.

I called them up straight away and explained that it was impossible to make a payment on an account when you had no idea of the payment details i.e. sort code, account number etc. and if it had not been the first statement that had not been posted on time I could have paid with details from a previous statement.

The representative apologised and refunded the charge and interest, however every month since I have been charged interest on the interest free amount. As it is only £1 a month and I saved £20 on the original purchase I had not bothered calling them back as I figured I was still saving £16 by the time I finished paying the original sum.

However I made 3 purchases on the card this month with the intention of paying them in full on receipt of the statement - which I believed under the credit agreement would therefore not incur any interest. I have done this in the past with other credit cards. As far as I was aware no credit card companies charge interest on purchase immediately.

The purchases came to just over £4,000 (having work done on the house - was for building materials ordered over phone). Imagine my surprise when I opened the statement today to find an interest charge of £58.76.Opening balance of £85.00, payment of £25.
i called up customer service only to be informed the interest is for the 3 purchases made through the month.

I pointed out that these were going to be paid on Friday when I get paid which is well before the payment due date of 30/4/10. Was then informed that interest is applied on the statement date on any purchases made in the month. I told them I have never seen or heard of any such nonsense.

This is clearly not what is printed on the back of the statement - maximum of 50 days interest free period provided payment made in full and on time.

I informed them I would be off the whole balance except the disputed interest closing the account and making an official complaint.

Anyone else had this problem or think I am wrong in my understanding.

magpiecottage

PAMDILL wrote: »

I informed them I would be off the whole balance except the disputed interest closing the account and making an official complaint.

That is sufficient to require them to invoke their complaints procedure under the Consumer Credit Act 2006. The difficulty is proving it unless you have details of the time of call and who you spoke to or if they recorded it.

However, it means they have eight weeks to issue a final response to you. If they fail or you are not satisfied with it you can take them to the Financial Ombudsman Service.

You do NOT have to put the complaint in writing even if they say you do.

However, if it goes to the Financial Ombudsman Service you must use the FOS complaint form.

Malky

Your very first sentence tells you why you were charged interest on £4000. The interest free period is for purchases made on Amazon's website only.

soul619

Malky wrote: »

Your very first sentence tells you why you were charged interest on £4000. The interest free period is for purchases made on Amazon's website only.

the op is on about the purchases made this month have incurred interest but they shouldnt have based on the 50 day interest free on all purchases regardless of were made

PAMDILL

I know the interest free to Sept 2010 was only for purchases on Amazon. My query is on the subject of being charged interest immediately on purchases made during a statement period?

Has anyone else seen a credit card company doing this?

david39

You said earlier that your statement read that you had an opening balance of £85 so presumably you had not paid off the original purchase in full.

On my MBNA card, the interest-free purchase period only applies when the account has a zero balance at the start of the statement period in which the purchase takes place and providing that the balance is then paid in full by the due date of the following statement. Otherwise purchases attract interest from the day the purchase was made.

If they publish the same rules-book for the Amazon card, it is covered by "Other Financial Information" section 2(d).

PAMDILL

david39 wrote: »

You said earlier that your statement read that you had an opening balance of £85 so presumably you had not paid off the original purchase in full.

On my MBNA card, the interest-free purchase period only applies when the account has a zero balance at the start of the statement period in which the purchase takes place and providing that the balance is then paid in full by the due date of the following statement. Otherwise purchases attract interest from the day the purchase was made.

If they publish the same rules-book for the Amazon card, it is covered by "Other Financial Information" section 2(d).

Do ou think that is even if the balance is under an interest free offer?

david39

If the Amazon card terms are the same as the generic MBNA terms then yes.
The interest-free option was only for purchases from Amazon in the first place, so you have fallen foul of two requirements for an interest-free deal on these additional items.

Sorry...

PAMDILL

david39 wrote: »

If the Amazon card terms are the same as the generic MBNA terms then yes.
The interest-free option was only for purchases from Amazon in the first place, so you have fallen foul of two requirements for an interest-free deal on these additional items.

Sorry...

Guess that will teach me to read the small print on every single section of a credit agreement.

I have had loads of credit cards over the years and this is the first that has had that requirement. Live and learn. Definitely closing it though after paying it off. The interest rate is pretty crap compared to my other card and at least the other card does not charge you interest like the Amazon one.

david39

I think you will find, if you read the small print, that all credit cards will start to charge you interest from the date of a purchase unless your current statement has a zero balance.
They advertise a 50 or 56 day interest-free period but that only applies if you are not carrying over a balance from previous purchases made in an earlier period.

gutt3d

I've done a Google search, since I've just experienced the very same thing (my Google search brought me here). I have an MBNA Amazon card - same as OP. I made a balance transfer for some £500 a few months back, and have been paying back £200 per month until clear. But in the meantime I've been using my card and was surprised (and I must be honest: a little angry) to see small interest charges for the last 2 months. Their rules on repayments state that each time I pay stuff back it'll go towards the highest interest first (e.g. 'normal expenditure', since the balance transfer remains interest free until later this year). So I went on happily using the card without realising I'd get stung for interest on purchases because I was carrying over the debt from my 'interest free' balance transfer.

I think that's a bit sneaky. The 'interest free' balance transfer would appear the problem, in my case. And while perhaps the money I actually transferred to the card doesn't accrue interest, it certainly seems to be _causing_ interest on regular transactions. I do genuinely find that pretty sneaky.

Do ALL credit cards do that?? I'm minded to pay off my MBNA card and find an alternative, but if they all play the same trick then I'm a little lost as to where to go. (I'll be sure not to make the same mistake again, but still - pretty miffed).