Credit price for goods more than cash price

st999

there are plenty of cases where companies will charge a %age extra for paying by credit card.

Even the DVLA do it when paying for your road tax.

unholyangel

bod1467 wrote: »

Maybe I'm misreading the OP, but there are plenty of cases where companies will charge a %age extra for paying by credit card.

There is rules surrounding that though - the surcharge should be cost reflective (it was european directive that was transposed into UK law).

Excessive charges prohibited
4. A trader must not charge consumers, in respect of the use of a given means of payment, fees
that exceed the cost borne by the trader for the use of that means.

All fee's that vary depending on payment method are subject to the above.

The legislation itself gives no definition of what should be considered direct costs but bis guidance on gov.uk site suggests that it should only be costs attributed to that specific payment method. If it is a cost incurred when paying by another method also, then it should be included in the headline price (as OFT consider advertising one price and then adding on compulsory extra's that are unavoidable to be misleading and against the CPRs (consumer protection from unfair trading).

£20 per £100 would be too high when paying by credit card imo but I got the feeling OP was referring to finance agreements. Could be wrong, just the way the OP was phrased.

paddyrg

Is it £120 regular/list price (which you'll pay if you take credit) and £20 cash DISCOUNT?

Money-Saving-King

paddyrg wrote: »

Is it £120 regular/list price (which you'll pay if you take credit) and £20 cash DISCOUNT?

That's how I read what the op means which would be fine IMO.

buff-tom

Hi the question came about from looking at a pay weekly shop set up by my local credit union to rival the likes of brighthouse, pay as you view etc.

There brochure:

http://durham.sbstore.org/deal?dealid=800

states a cash price of (bed used as an example)

Cash Price £454.99
Total Cost for Credit £549.99
Number of Weeks 104
APR 24.19%
Savings £26.00
Weekly Price £6.93
Total Payable £720.72

This to me is wrong as the cash price is the cost of the goods plus a profit (or they wouldn't be in business long) whereas the credit price is a bigger profit plus profit (or at least costs offset) from the interest

Collabora

Money-Saving-King wrote: »

That's how I read what the op means which would be fine IMO.

i read it the same

agrinnall

buff-tom wrote: »

Hi the question came about from looking at a pay weekly shop set up by my local credit union to rival the likes of brighthouse, pay as you view etc.

There brochure:

http://durham.sbstore.org/deal?dealid=800

states a cash price of (bed used as an example)

Cash Price £454.99
Total Cost for Credit £549.99
Number of Weeks 104
APR 24.19%
Savings £26.00
Weekly Price £6.93
Total Payable £720.72

This to me is wrong as the cash price is the cost of the goods plus a profit (or they wouldn't be in business long) whereas the credit price is a bigger profit plus profit (or at least costs offset) from the interest

I actually think they are wrong to do this, they should be basing the credit price on the base cash price, but as you say (both here and in your first post, I'm not sure why everybody else seems to have misinterpreted that because it was pretty clear to me what you meant) they have added a cost to the base price then charged extra for the credit facility. I'm not sure whether the law prevents this, but even if it doesn't I wouldn't touch the company with a barge pole even if I wanted to pay cash.

Collabora

agrinnall wrote: »

I actually think they are wrong to do this, they should be basing the credit price on the base cash price, but as you say (both here and in your first post, I'm not sure why everybody else seems to have misinterpreted that because it was pretty clear to me what you meant) they have added a cost to the base price then charged extra for the credit facility. I'm not sure whether the law prevents this, but even if it doesn't I wouldn't touch the company with a barge pole even if I wanted to pay cash.

all furniture and car sales do it this way

Cash Price £454.99 - for paying full in cash
Total Cost for Credit £549.99 - £95 admin fee for setting up and arranging credit (credit check etc.) + deposit
Number of Weeks 104
APR 24.19%
Savings £26.00
Weekly Price £6.93
Total Payable £720.72 - £1.64 per week extra to process credit payments

agrinnall

Collabora wrote: »

all furniture and car sales do it this way

Well maybe they do, but is that the case in other sectors, or is it just these two that are operating that way?

bod1467

agrinnall wrote: »

I'm not sure why everybody else seems to have misinterpreted that because it was pretty clear to me what you meant

Considering you didn't reply to this thread until AFTER post #16 (which is much clearer than what was described in the OP) then I find your comment somewhat fatuous.