We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

C/Card Overlimit Pitfall ?

Options
Hi Guys n Gals,

Thought you might like to know of a conversation I had with my credit card provider.

Hearing of success at reclaiming unfair bank/card charges, I contacted mine regarding the £140 of charges from the past 18 months, all but one being due to going over my limit.

I was given the normal speil about how their charges reflect costs etc. which I expected. I asked why they allowed my card to be used if the purchase would breach the credit limit. To my mind, if there is insufficient funds for the purchase, then surely they have systems in place to prevent it being authorised ?

I was told that sometimes retailers will KNOW if a purchase is within limits or not but can take the decision to let it go through or refuse the card.It would seem to depend on the retailer's "floor limit", and some could be upto £50 before stopping a transaction.

I'm still going to persue reclaiming charges, but wondered if anyone else had heard something similar ?

Bb

Comments

  • Hi Toots,

    Sorry to hear the mess your Dad's in. Doesn't seem to get any easier does it ?

    Yes you're right, all lenders should have some part to blame if not a BIG part. I worked as a Financial Consultant for 4 years with 2 BIG firms and the way I saw my bank target people for loans and credit cards got my blood boiling, I quit in the end, now I sleep alot better.( Except for when I think about Cap One - bless their cotton socks.

    Good lucK on recovering the Charges. I read through Martins Tips regarding the right steps to reclaim costs. Very easy to follow, I'm starting a letter to Capital One and Nat West tonight.

    Let me know how you get on.

    Bb
  • Bankbasher wrote:
    I was given the normal speil about how their charges reflect costs etc. which I expected. I asked why they allowed my card to be used if the purchase would breach the credit limit. To my mind, if there is insufficient funds for the purchase, then surely they have systems in place to prevent it being authorised ?

    I was told that sometimes retailers will KNOW if a purchase is within limits or not but can take the decision to let it go through or refuse the card.It would seem to depend on the retailer's "floor limit", and some could be upto £50 before stopping a transaction.

    The "floor limit" is the maximum amount that the retailer will allow you to charge to the card without authorising it with the credit card company first.

    So, say the floor limit was £50 (this was typical when I was involved in these things 8 years ago).
    You make a purchase totaling £45. Below the floor limit so might not be authorised with the CC company first.
    You are £30 below you credit limit.
    The transaction is processed and you are now £15 over limit.

    With the online authorisation these days, there should be less transactions which are not authorised first. However, with many retailers if the authorisation is taking over a certain time limit to complete, and the transaction is below the floor limit, it does happen.

    You can usually tell by looking at your receipt. The authorisation number is usually printed on there. If it is 00000 or some other unlikely number such as 55555, then it has probably not been pre-authorised.

    Also, I cannot guarantee that it is still the case, but the pay-at-pumps in the petrol stations of a major supermarket with a name starting with "T" never did online authorisation. That was hy you could only buy fuel upto the floor limit.

    I hope this sheds some light.
    [size=-2] If this post was unhelpful, please tell me.
    If it was helpful, please tell everyone - Press the [highlight]Thanks[/highlight] button!
    [/size]
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.