Credit card allowed over limit then charged - is this unfair charge?

Mr_Goodkat

As has been explained this is perfectly fair, is covered in the terms and conditions and is something a lot of credit card companies will either allow or not be able to stop at the time.


The transaction could have been below the floor limit at the shop meaning they did not need to check available funds.


It could be that other transactions elsewhere had been below the floor limit and not posted to your account meaning even a check at the time could have resulted in sufficient available funds.


Finally credit card companies may at their discretion allow you to go over your limit but they charge you a fee for it just like most current accounts with an offline debit card will allow you to go into an unauthorised overdraft. You are upset because they let you go over your limit and charged you a £12 fee but you or someone else would be upset if you/they were standard somewhere and the credit card company declined a payment at a fuel station on for a train fare because it would take you over your limit.


The only person responsible for staying within your limit is you. With the presence of telephone, internet and text message banking it is very easy to put safeguards in place to make sure limits are not exceeded.


Finally if this is your first offence with the credit card company and you contacted them in an apologetic and polite manner I would be very surprised that they would not refund the fee as a goodwill gesture. If you were ranting and raving or it is a repeat offence then not surprised they enforced the terms and conditions you agreed to.

andyfromotley

PeacefulWaters wrote: »

As a responsible borrower I don't go anywhere near my credit limit.

I repay my balance in full every month.

I don't want my card declining when networks are busy or computers fail.

Why do you want a system that does this?

Because as this forum shows there are many on here who are not responsible borrowers. I am with you, i have never incurred this sort of fee and would be mortified if i did, but i do care for those that aren't as in control as you or i am.

I have already acknowledged that they are within their rights to charge this fee. I just can't help but feel that this is a nice little earner for them. I don't accept that it technically can't be done, if it became law to do it i doubt very much if they would just pack up their businesses muttering,'oh we can't do that', i reckon they would have the extra capacity available in about a week!

I'm all for responsible borrowing, but i'm equally for responsible lending too!

dzug1

If it became law they would find ways round it, just like everything else. Comply with the letter and make it up elsewhere. If regulation becomes too onerous (as arguably it is already) they could just quit the market


And what exactly is wrong with 'nice little earners'?

andyfromotley

dzug1 wrote: »

If it became law they would find ways round it, just like everything else. Comply with the letter and make it up elsewhere. If regulation becomes too onerous (as arguably it is already) they could just quit the market


And what exactly is wrong with 'nice little earners'?

Hmmm yes i look around and notice the companies stampeding out of the credit card market due to the onerous regulation. :-/

Nothing wrong with 'nice little earners'. I hear that PPI was one of the best, oh and surely we can squeeze a few quid out of 'packaged bank accounts' but even that was overshadowed by buying up those lovely american sub prime mortgages. Nope nothing wrong with nice little earners.....

I suppose i just think differently about the demands we make (or should make) of financial institutions.

King_Of_Fools

andyfromotley wrote: »

I don't accept that it technically can't be done, if it became law to do it i doubt very much if they would just pack up their businesses muttering,'oh we can't do that', i reckon they would have the extra capacity available in about a week!

The UK government could not make this law as they would have no jurisdiction over how cards are used in other countries. Unless the banks prevented everybody from using their cards abroad there would be no way they could comply with that law.

Unless there was a worldwide online system that had to be used by everybody accepting credit cards (including market traders in less developed counties with no internet connection) it would not be technically possible to achieve.

andyfromotley

Oh thats a total red herring. Of course they don't have jurisdiction abroad, in the same way they can't tell me how fast i should drive abroad, but they can sure as heck tell me how to behave whilst i'm here.

But they do have jurisdiction over this country, where no doubt the overwhelming majority of transactions take place, where they could easily legislate for this if they chose to. It is technically possible. Don't get me wrong, I'm not holding my breath.

i think we've done this to death to be honest, i think this is another example of reckless lending (and YES it is also reckless or at least careless borrowing!) and i think its important to focus equally upon that.

King_Of_Fools

andyfromotley wrote: »

But they do have jurisdiction over this country, where no doubt the overwhelming majority of transactions take place, where they could easily legislate for this if they chose to. It is technically possible. Don't get me wrong, I'm not holding my breath.

I agree that the majority of transactions would take place in the UK but even things like contactless transactions rely on the offline system. The whole selling point of contactless is that it takes a second to authorise the transaction. I used my credit card today at a cafe and it took over a minute to clear the transaction. I would hate to imagine the queues that would form at the underground stations if it took that long to authorise everybody's contactless card!

It would help to have more things checked but unless every single transaction is checked in real-time the system could never stop you going over your credit limit (which was the original point of this thread).

SamGR

cas1703 wrote: »

Hi,

Is it worth making this an official complaint and going to Ombudsman or am I stuck? I know I when over the limit but I thik they should have a duty to ensure that I am within the credit limit by not allowing transactions that take you over.

Many thanks in advance

You want to waste the FOS time because your CC provider charged you for over spending 'their' money and then charging you for it?

They are not your accountants. you should always know your limit.

Take this as a lesson my friend.

misr

Hi,
I'm new to all these, and hope someone there help me, I didn't go over the limit with my Aqua credit card, as I wanted to improve my credit score that's why I have their card, but instead of improve my credit score it got worse, I watch my credit limit and didn't go over my limit, but when I received my new statement I found a £12.00 fee for being over the limit, I phoned them and all they kept saying when interest added it took my account over the limit, I kept saying that's not right but still insisted the fee was right.
On my new statement asking for minimum payment of £26.00, but they said to save myself another £12.00 next month I have to pay £32.00 to allow interest when added not be over the limit .
Can anyone help me please as I feel that's not right, as I have a limit for a reason to use it.

PeacefulWaters

Why's it not right?

Did spend plus interest take you over the limit or not?