What is the advantage to paying by Credit Card????

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paid for my hoilday with my credit card in April. The holiday was then cancelled as the holiday company went bust. I have been told by Lloyds TSB, my credit card provider that they have no obligation to keep the payment on dispute until I get a refund and now, as the payment has come off dispute, I have to pay the interest on the payment. This has been added on to my monthly payment which means this months payment has more than doubled the previous months.

I asked if I could claim this interest back when I had had a refund for the holiday but was told I could n't.

So I have to pay £180 interest on a payment for a holiday I did not go on.

Please can someone explain what possible benefit there was by paying by credit card????? Card companies are always saying you should pay for big purchases by card as you 'will be covered'.

Covered for what exactly?????!!!!!

Or can anyone tell me if I have any chance of claiming back this interest as feel ROBBED AND LIED TO by Lloyds.

thanks for letting me rant.:mad:
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  • toolbox244
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    please can someone tell me how to post a question on here. im new to this?
  • kilasuit
    kilasuit Posts: 645 Forumite
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    paid for my hoilday with my credit card in April. The holiday was then cancelled as the holiday company went bust. I have been told by Lloyds TSB, my credit card provider that they have no obligation to keep the payment on dispute until I get a refund and now, as the payment has come off dispute, I have to pay the interest on the payment. This has been added on to my monthly payment which means this months payment has more than doubled the previous months.

    I asked if I could claim this interest back when I had had a refund for the holiday but was told I could n't.

    So I have to pay £180 interest on a payment for a holiday I did not go on.

    Please can someone explain what possible benefit there was by paying by credit card????? Card companies are always saying you should pay for big purchases by card as you 'will be covered'.

    Covered for what exactly?????!!!!!

    Or can anyone tell me if I have any chance of claiming back this interest as feel ROBBED AND LIED TO by Lloyds.

    thanks for letting me rant.:mad:
    search this site for section 75
  • opinions4u
    opinions4u Posts: 19,411 Forumite
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    1. If you pay the bill in full, you have effectively got somewhere between 1-2 months interest free credit.
    2. If you have a loyalty card, you can earn cashback or other rewards.
    3. Section 75 protection for exactly the circumstances you describe around goods / services not being provided to an appropriate standard.

    You haven't really explained why no refund has come your way. Is it a delay or are they saying you don't qualify for some reason.
    Card companies are always saying you should pay for big purchases by card as you 'will be covered'
    Please can you show the users of the site where they do this. I've never noticed a card company referencing this protection as a selling point.
  • dunstonh
    dunstonh Posts: 116,596 Forumite
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    I have been told by Lloyds TSB, my credit card provider that they have no obligation to keep the payment on dispute until I get a refund and now, as the payment has come off dispute, I have to pay the interest on the payment. This has been added on to my monthly payment which means this months payment has more than doubled the previous months.

    That is correct. It is not a disputed payment.
    Please can someone explain what possible benefit there was by paying by credit card????? Card companies are always saying you should pay for big purchases by card as you 'will be covered'.

    Covered for what exactly?????!!!!!

    You are covered as you will get your purchase refunded.
    Or can anyone tell me if I have any chance of claiming back this interest as feel ROBBED AND LIED TO by Lloyds.

    Lloyds have no obligation to pay the interest on your debt. You have not been robbed or lied to by Lloyds.

    It is unfortunate when this happens but you get your money back. However, you have to use your personal savings to cover the gap between paying and getting the refund. That is what an emergency fund is for. If you dont have an emergency fund then you have to borrow the money and in that case you will pay interest on it.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • 2010
    2010 Posts: 5,371 Forumite
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    toolbox244 wrote: »
    please can someone tell me how to post a question on here. im new to this?

    Find the relevant board you want to post your question on and at the top left hand corner click on "new thread".
  • allofushere
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    I understand all of these comments but if I had paid for my holiday by cash I would receive a full refund and not have any interest to pay. By paying by card i do recieve a full refund ( from the civil aviation authority incidently, not Lloyds) but I also have to pay Lloyds the interest. How is that a better way to pay? I realise I may have been a little naive but every single person I have discussed this with is under the impression that i will be fully reimbursed as part of this mystical 'cover' by the credit card dealer. Surely somewhere along the way this impression has been given by the issuers?? As a member of Jo Public I believe that many people are under the same impression as me, wrong as it may be.

    As I have to pay the interest on this transaction it has not benefited me at all to pay by credit card. Oh well, I guess every day is a school day.
  • ironlady2022
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    On any type of credit card, once you make the purchase, you have up to 59 days to pay it (as in until you get you bill). Depending on the type of credit you have, if you do not pay in full, you will be charged the interest unless it states 0% on purchases for 6 months say.

    EG

    -Normal credit card with no 0% deal if you pay £1000 holiday on there and you do not pay this off when you receive your bill, then you will be charged the interest rate eg 18.9% per annum
    -0% Purchases Credit Card for 12 months means if you pay £1000 on there again, you can use 12 months to pay so split this down it would be £1000 divide by 12 months (£83.33). So long as you pay this within the interest free period then the bank does not make anymoney out of you.

    Regarding you getting a refund if you paid cash, are you sure? As the company has gone bust, I assume they have more priority debts before they pay you. The credit card company are obliged to give you a refund.
  • allofushere
    allofushere Posts: 184 Forumite
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    edited 30 December 2010 at 8:41PM
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    Ok I realise I was crazy to think I would not have to pay anything but surely the card company would have been much more responsible if they had explained the full goings on when a payment is on dispute. they way it was explained to me was the payment was frozen as I was getting a refund. I know they are a business and need to make oney but i would have been prepared for a massive rise to my monthly payment one month if they had explained their method to me. Also, had they explained the situation when I first put the item on dispute, i may have been able to borrow the money and pay it off thus removing the need to pay a lump sum of interest when they took it off dispute. When you ring the banks they have loads of time to sell you stuff, ask if you're having a good day etc, maybe 5 minutes explaining the process properly (i did ask this and assumed it had been done) would save people a lot of upset in the long run. Or maybe they want to see you pay the interest rather than pay the lump sum off??

    By the way, now feel really stupid on top of everything else as judging by the tone of the responses it appears I'm the only one ridiculous enough to not realise these things.
  • ironlady2022
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    You are not ridiculous as not everyone knows the ins and outs of a credit card. Or rather the Operator should have answered all your questions for you when you signed up.
  • dunstonh
    dunstonh Posts: 116,596 Forumite
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    How is that a better way to pay?

    If you had paid by cash you would not be getting any refund at all. That is why its better.
    every single person I have discussed this with is under the impression that i will be fully reimbursed as part of this mystical 'cover' by the credit card dealer.

    With respect the typical consumer knows diddly squat about financial matters or more commonly knows a little information, half of which will be wrong. The cover is not mystical. It is set down in law and has set terms and conditions.
    Surely somewhere along the way this impression has been given by the issuers??

    I have never seen any marketing or information provided by any card issuer to say that they will cover interest on your debts.
    As I have to pay the interest on this transaction it has not benefited me at all to pay by credit card. Oh well, I guess every day is a school day.

    Yes it has. If you had paid by cheque/cash then you would not be getting any refund. You would become a creditor and by the time priority creditors are paid over a period of a year or two you may end up with a few pence returned but more likely you would end up with nothing.
    surely the card company would have been much more responsible if they had explained the full goings on when a payment is on dispute.

    The payment is not in dispute. So, telling you the procedure for a disputed payment would just confuse you more.
    By the way, now feel really stupid on top of everything else as judging by the tone of the responses it appears I'm the only one ridiculous enough to not realise these things.

    No. The only bits that you dont really appear to follow is your belief that using the card and getting a refund is no different to using cash and getting no refund. Also, you have some confusion over the process and think its a disputed transaction rather than a section 75 claim

    Think of it as a bit like an insurance claim - its not insurance but the way it works is a bit similar in that you have to wait to get your payout and you have to fund it yourself in the meantime.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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