Charging a balance transfer fee for refunding the credit balance on a credit card?

curiousgeorge1

A couple of times in the past, my bank has transferred what extra money I have on my credit card (in credit) to my current account free of charge (they said if the money came from refunds or an overpayment it was fine to do free of charge). The credit card is with the same bank as my current account. But today, I have a credit of a few hundred pounds on my credit card because of a refund and my bank say it will cost me 2.9% to transfer the credit to my bank account.

Is this fair? I've always thought of it as my money, and if it's in credit they should be able to give me my money free of charge? Why am I wrong?

Paul_Herring

Is it really that much of an issue to leave the credit on the card, and simply spend on it as normal, or would it take too long to get it back to £0?

In answer to your question, yes, I think your provider is being unreasonable, however strictly speaking the bank is right, a balance transfer is a balance transfer regardless of the balance on the card to begin with.

Try once more with them, asking why they are charging you to reduce a positive balance to zero, and if you have no luck I suggest looking for a credit card (and possibly (a second) current account) elsewhere.

Which bank is it?

Eydon

I wonder if this is a case of the person on the other end of the phone getting the wrong end of the stick.

How did you ask for the money. Did you perhaps use the words "balance" and "transfer" in the same sentence? If so they might be thinking that you are asking for a Super Balance Transfer to your current account (hence the charge).

Try phoning again and asking if they will return the credit balance on your card back to you. You might get a different response.

curiousgeorge1

This is First Direct. They themselves seem unclear of their own rules. I have done this twice before when I was told that it occurs no charges at all as long as the credit on the card is due to a refund or a payment from me (I'm not really sure what else it would be due to though). The first time I managed to get it done for free, he had to check with colleagues, but it was done and I had the money the same day. This time around they said even after checking with the credit card department that it would always impose a charge and would also attract interest from the day it was done which I thought was funny (how could it attract interest with nothing owing on the card?!)

It wasn't due to lack of communication, we discussed in clear terms for quite a while. She couldn't give me an answer to how I was able to do it in the past and not now.

The thing is, what are their costs for transferring a credit from a credit card to one of their own accounts? If they told me there was a processing fee of 50p or a £1 I'd be okay with that, but to slap a 2.9% charge to have my own money in my bank account I think is outrageous.

stephane_2

Write a formal complaint to FD & see how it goes....have you looked at your CC T&C for positive balance....

Paul_Herring

curiousgeorge1 wrote: »

I have done this twice before when I was told that it occurs no charges at all as long as the credit on the card is due to a refund or a payment from me (I'm not really sure what else it would be due to though).

Deliberately overpaying to create the credit to transfer to a current account. (Usually from another credit card that has 0% fees on balance transfers.)

Such cards that explicitly allow this (without charge) are called 'mules' with those who 'stooze.' Egg used to allow this - it's fuzzier now.

The thing is, what are their costs for transferring a credit from a credit card to one of their own accounts? If they told me there was a processing fee of 50p or a £1 I'd be okay with that, but to slap a 2.9% charge to have my own money in my bank account I think is outrageous.

The charge is to discourage incurring a debt due to cash transfers (as opposed to purchases,) for such things as paying off other debts, or to prevent the card being used as a mule. It's not an 'admin' charge - think of it as a penalty.

curiousgeorge1

Ah yes, I see, the first person at First Direct did mention that the fee is chargeable if that was the case that you had created this balance from other credit card balance transfer etc. But that's not what I've done at all.

Not long ago I overpaid my Virgin Atlantic credit card by mistake and they had absolutely no problem with sending the credit balance back when I asked.

I can't find any terms and conditions specifically referring to positive balances. It seems it just depends on who you get on the phone.

Judith_W

Can't you just buy some shopping on the card to reduce the balance to 0? Even offer to buy something on someone else's behalf, and take the cash for it?

YorkshireBoy

Or alternatively, if this experience has soured your relationship with FD, simply close the account! You'll get your money back FOC then.