Asda Money Credit Card - BEWARE!!!

SimonStevo_2

WARNING!!! If you don't pay the balance off in full each month, they charge you interest on the full balance, not just what you didn't pay off.

My balance last month was £1,864.60 and for some reason I paid off slightly less, I sent them £1,836.10.

Instead of paying interest on the bit I still owe (£28.50) they've charged me £26.30 interest, which is based on the total balance of £1,864.60.

Although this is stated in the Ts and Cs (lesson learnt here, I must read Ts and Cs, even for companies I 'trust') this feels totally underhand to me. How can they charge me interest on money I don't owe them?

I've never experienced this way of calculating interest before, is it common?

Anyway, card is now in pieces in the bin.

aleph_0

SimonStevo wrote: »

Instead of paying interest on the bit I still owe (£28.50) they've charged me £26.30 interest, which is based on the total balance of £1,864.60.

Although this is stated in the Ts and Cs (lesson learnt here, I must read Ts and Cs, even for companies I 'trust') this feels totally underhand to me. How can they charge me interest on money I don't owe them?

I've never experienced this way of calculating interest before, is it common?

Anyway, card is now in pieces in the bin.

I've spoken to both Sygma Bank UK (who operate the card) and Asda customer services.

Yes, this is how all credit cards work. It's not even in hidden deep in the T&Cs, the summary box states:
"Up to 50 days on Standard Purchases when you pay your balance in full every month by the due date"

If you don't pay in full, then the interest free period doesn't apply, and the interest applies from the transaction date until the payment date. You did owe the money between these dates, and they are asking you to pay the interest.

I'm not sure why this is a reason to throw the card in the bin - the card is still a good card (but not the best card for cashback/rewards, see the articles on the main site), you just need to follow the terms and conditions.

Wheres_My_Cashback

SimonStevo wrote: »

WARNING!!! If you don't pay the balance off in full each month, they charge you interest on the full balance, not just what you didn't pay off.

My balance last month was £1,864.60 and for some reason I paid off slightly less, I sent them £1,836.10.

Instead of paying interest on the bit I still owe (£28.50) they've charged me £26.30 interest, which is based on the total balance of £1,864.60.

Although this is stated in the Ts and Cs (lesson learnt here, I must read Ts and Cs, even for companies I 'trust') this feels totally underhand to me. How can they charge me interest on money I don't owe them?

I've never experienced this way of calculating interest before, is it common?

Anyway, card is now in pieces in the bin.

How droll !

SimonStevo_2

I'll get my coat....

I never knew that!! Please ignore this post.

aleph_0

SimonStevo wrote: »

I'll get my coat....

I never knew that!! Please ignore this post.

You must be new here, that's not how things are meant to work. You're meant to come back and say how all banks are evil, how they're planning to take your money and your first born child, and claim that we all work for the banks.

This is then followed by a long tedious conversation where no-one gets anywhere.

Coming back and saying "thanks, I've learned something" and then going on to be a more savvy consumer just isn't the done thing!

SimonStevo_2

Yes, thanks Aleph for your response.

In my defence, before posting I asked several colleagues around the office and they all had the same view as myself!

To be honest, I'm a bit embarrassed that I didn't know this, many years ago I used to work at the Halifax!

aleph_0

SimonStevo wrote: »

Yes, thanks Aleph for your response.

In my defence, before posting I asked several colleagues around the office and they all had the same view as myself!

To be honest, I'm a bit embarrassed that I didn't know this, many years ago I used to work at the Halifax!

I don't think the banks help things, with the focus on selling products that are all very similar, using various techniques to confuse the consumer (for example, reward credit cards often make it quite difficult to find out how much each 'point' is worth, before getting the card).

The focus has been on generating more complex products which look good on paper, and are, but only if one uses them cunningly.

There is also a moral hazard in that customers paying interest is a nice profit maker - they could put more effort into educating (sorry if that's a bad word) customers, or they could make the interest-free period rules less strict, so that the interest-free period was up to 50 days on all spending, regardless of the exact amount paid back.

lisyloo

I don't think the banks help things

Really - you mean they are out to make money and not to be a charity, educate people or for the good of humanity?? That's called being a business.

The focus has been on generating more complex products

That bit is called marketing.

they could put more effort into educating (sorry if that's a bad word) customers

Why would a business want to do any more than is legally necessary?

Wheres_My_Cashback

SimonStevo wrote: »

I asked several colleagues around the office and they all had the same view as myself!

Don't believe that for a minute unless your fellow colleagues (Ts) are all 12 !

electrobix99

Wheres_My_Cashback wrote: »

Don't believe that for a minute unless your fellow colleagues (Ts) are all 12 !

I asked the people I work with and they thought it would only be on the part you did not pay off.

aleph_0

lisyloo wrote: »

Really - you mean they are out to make money and not to be a charity, educate people or for the good of humanity?? That's called being a business.

That bit is called marketing.

Why would a business want to do any more than is legally necessary?

Oh, don't get me wrong, I don't expect the banks to want to help anyone, and I realise creating products which look much better than they are is the game they'd want to play.

As to why a bank might want to do more than is necessary - this might still be a good business decision, such a model with reasonable charges that the consumer fully understands might retain existing customers better.

Even though I currently benefit from playing the banks at their own game, I'd advocate stronger regulation to fix some of these problems and make things more equitable - but I understand most on this forum would not agree.