Capital One (Luma) - interesting approach to refunds and payments.

fleetwoodguy

My last statement balance on my Luma Credit Card toward the end of March was £261.73, with the payment for the full balance to be taken yesterday. Looking at my bank account in the morning I noticed only £212.18 had been taken. Strange? I had a refund last week, which totals the difference, but how can it be, that a refund in this billing period counts as a payment towards the last statement balance?

Well, I confirmed that this is the case by secure message:

Thank you for your message.

I understand your concern.

I can confirm that you're correct in thinking about the direct debit payment and the adjustment that was done on the account.

Please note that if you received any refund on your account and if they was credited 3 working days* prior to your direct debit due date, the full payment will be adjusted and will only take payment minus the refunds on your account.

I can assure you that purchase interest will not be applied on your account.

I hope that this information helps you. We value you as a customer and look forward to assist you in future.

If you’ve any other queries, please send us a further secure message.

Is there anything to stop me holding a balance of £1000 or more on the card, purchasing and refunding this amount (by ordering at M&S, and then cancelling the order, for example, as in this case) early in each statement period, and basically having an interest free loan in perpetuity? :rotfl:

[Deleted User]

You'll still pay interest in any balance you don't pay off.

fleetwoodguy

Deleted_User wrote: »

You'll still pay interest in any balance you don't pay off.

i could get around this by either progressively increasing the size of the refund, and leaving a direct debit to pay off in full in case i dont cover it...

[Deleted User]

So how will you get an interest free loan? Your payments and refunds need to equal your balance.

fleetwoodguy

Deleted_User wrote: »

So how will you get an interest free loan? Your payments and refunds need to equal your balance.

This is why I didn't understand why they'd apply refunds in the way they did.

Build up statement balance to £1000 (for example).

Statement 1 says statement balance £1000.

Purchase for £1001. Refund for £1001.

£0 payment taken (as refund covers the £1000).

Statement 2 says statement balance £1001.

Purchase for £1002. Refund for £1002.

£0 payment taken (as refund covers the £1001).



Am I missing something? Their system doesnt seem to make sense!

[Deleted User]

Your refund will only cover the purchase. You would still need to pay the original £1k.

fleetwoodguy

but thats the thing... they're saying it reduces the payment owed on the *previous* balance. so it must cover the original 1k and not the purchase?

[Deleted User]

But your balance would now also have your 1k purchase on - so it's now a 2k balance.

You can't get a refund applied without having previously spent the same amount.

molerat

What OP is saying is

Month 1 spend £1000, bill arrives, £1000 outstanding .... any refund between statement date and due date is deducted from the DD.
Month 2 spend £1000, get it refunded, that refund is deducted from M1 payment due, DD = £0, M2 bill £1000
M3 spend £1000, get it refunded, that refund is deducted from M2 payment due, DD = £0, M3 bill £1000
and so on.

[Deleted User]

I see.

Sounds like a lot of work for an interest free £1k loan. Plus you'd probably get thrown out of M&S after a couple of months.