Potential interest free method for any credit card

coalraven

Hi

I've had a look through search to see if this has already been mentioned but could not find anything.

I may be wrong with this, but it might be of value to some people. And it is probably only relevant if you only use your credit card to buy the occasional item.

I have a Nat West credit card and pay the balance in full each month by DD. A few months ago I had a balance of about £800. The following month I bought a new vacuum cleaner on the card for about £200 but it was broken and so I took it back and got a refund. When the DD went out of the bank it was only for £600. After looking at the statement this was because the £200 refund had counted towards that months repayment of the previous months balance.

Using this logic then you could buy an item for say £100 on your card and then next month, as long you buy an item for £100 and then return it for a refund, you don't actually pay your £100. Do this each month until you are ready to pay and there will be no interest.

I had taken one vacuum back to Comet, and because I had opened the box but it was not faulty I had store credit (rather than paying a 10% restocking fee). If I had not opened the box I could have had a refund. The credit card refund was done by Currys and it was due to a faulty item, however they might also do full refund for unopened items. Maybe many shops will give a full refund to your card for unopened items.

You will proabably need to make sure you time the purchase and refund correctly so that the refund hits the credit card in time to be allocated as the payment for the month.

I cannot say if this will work with other credit cards, and not sure if it would be the same if you don't pay by DD. I think you will also need to be starting from a zero balance.

I would be interested to hear other views on this. As it seems so simple I'm suprised it's not more well known. But as I said at the start this may not work so please do post the correct info if I'm worng.

Thanks

chexum

coalraven wrote: »

Using this logic then you could buy an item for say £100 on your card and then next month, as long you buy an item for £100 and then return it for a refund, you don't actually pay your £100. Do this each month until you are ready to pay and there will be no interest.

So what you're saying is that you time a new (larger than) £100 purchase after the statement, but return it in a few days time (to make sure both the debit and the credit appears on the same statement), you may have paid out the £100 required, but the balance is still £100, so they could claim you did not clear the full balance.

I think I've seen card t&cs where they explicitly say refunds are not considered to be payments in the current statement cycle (but reduce the balance), but can't find it.

Even if it does seem to work, you needed to be very careful about timing purchases that they show up on the monthly statement, but return it just in time, and you're still worse off with the travel/petrol/return shipping costs. For returns without travel costs, you can only do this so many times with local shops with expensive items that you can easily carry...

It will either cost you something which is not interest (at the least, your time), while increasing the shops' expenses with Visa/Mastercard charges, and human labour so we'll see more shops introducing restocking fees. I'll thank you for that. :cool:

Any

A bit too much hassle and risk just to get an item you actually want couple of months before you can actually afford to pay for it?

Stupid idea in my eyes.. but everyone to their own.

[Deleted User]

Suspect you might get banned from Comet after you've returned your 6th vacuum cleaner....

Saucepot

Deleted_User wrote: »

Suspect you might get banned from Comet after you've returned your 6th vacuum cleaner....

Not if you adopt a series of clever and ingenious disguises.

coalraven

True, it could be hassle rather than waiting a few months. Maybe could be used if you were going to put something on the card because you need it now, eg. holiday deposit, but can't pay for a while -could avoid any interest

And you could buy something and take it back a few mins later 'Just spoke to my wife and she's been and got one earlier'. Plus you don't have to get the same thing from the same shop each month, but thanks for highlighting how daft that would be.

However, the T&Cs of the card might prevent this working. That's more the info I was hoping to find out.

Dave_the_Ginger_Cat

The Ts&Cs will almost certainly not encourage this. Some lenders this will work for, and some it won't, but I think repeated use of such a tactic, even if it did work would get you flagged up on a report of unusual behaviour and would attract more attention that you'd want.

There's also perhaps the point that you'd also be using up the retailer's time and resource in buying and returning the goods, which ultimately gets priced into everyone's bills.

INT1

Just for info, acquiring banks monitor credits against debits to all point of sale transactions, so evenutually it would get flagged up

chexum

coalraven wrote: »

However, the T&Cs of the card might prevent this working. That's more the info I was hoping to find out.

There you go (or rather don't) with Capital One:

https://www.capitalone.co.uk/creditcards/secure/terms-and-conditions.jsf

"Any refunds that are applied to your account after your statement date will not affect the monthly payment due but will be reflected in your following monthly statement."

Even if it's not spelled out this way to prevent this scheme, I would also think that if you keep exercising the merchants, but the bank won't see any of your money, I would think they would consider this activity fraudulent sooner or later.