Santander 123 Card downgrade

EachPenny

YorkshireBoy wrote: »

Seems like their policy may have changed? My experience last year was that you could hold (at least) two Santander cards simultaneously, so no need to close first before re-applying.
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When I closed my 123 card last year there was a workaround for both getting the last month's cashback AND avoiding the fee. Can't remember the exact detail (the CSA actually suggested it...they're not all clueless!), but maybe 'advance notice of closure'?

I'm not sure about a policy change, I didn't actually ask about opening a new card, not least because they now have a minimum £7,500 income requirement so they wouldn't want me as a customer anyway

If you do remember the workaround for the cashback do please let me know. I will call them again and enquire, but the response I got today was along the lines of "you're leaving us, why would we give you a bonus?" (not the exact words used)

Another question which I just thought of, when the 0% (on purchases) deal comes to an end, do I just have to clear the balance that was on the previous month's statement (my assumption) or is it a case of reducing the balance (including recent purchases) to £0? Thinking of Santander's quirky approach to everything I don't want to make an assumption and get hit with an interest bill.

YorkshireBoy

EachPenny wrote: »

If you do remember the workaround for the cashback do please let me know.

Looking back at my MS Money package I see that cashback always preceded the account fee by one day.

I settled the account to £0 on Friday 9/12/16. Cashback was paid the same day. The CSA put the request on to formally close over the weekend, and assured me the fee wouldn't charged. I diarised to check the £3 fee wasn't subsequently added, and it wasn't. Wouldn't have actually cost me anything, since the last cashback payment was £3.40.

Another question which I just thought of, when the 0% (on purchases) deal comes to an end, do I just have to clear the balance that was on the previous month's statement (my assumption) or is it a case of reducing the balance (including recent purchases) to £0? Thinking of Santander's quirky approach to everything I don't want to make an assumption and get hit with an interest bill.

^^^^^ That one. That's the date the 0% ends. Remember, you only get an interest free period on purchases if you've paid the last two statements in full...and you haven't.

EachPenny

YorkshireBoy wrote: »

I settled the account to £0 on Friday 9/12/16. Cashback was paid the same day. The CSA put the request on to formally close over the weekend, and assured me the fee wouldn't charged. I diarised to check the £3 fee wasn't subsequently added, and it wasn't.
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That's the date the 0% ends. Remember, you only get an interest free period on purchases if you've paid the last two statements in full...and you haven't.

Thanks for the help YorkshireBoy, I'm glad I asked as you've saved me some money

I've just checked my dates and apart from one glitch, the cashback does come the day before the fee. But my dates will be mid-week, so not sure I'll be able to get away with it like you did.

The end of the interest free period is a bit of a trap - all I've had from Santander is some smallprint on my last statement which didn't really make it clear what I needed to do.

The two statements paid off in full is especially complicated - if I understand that correctly it means any purchases made in the month after the end of the 0% will always be subject to interest, which either means paying a month's card fee and earning no cashback, or else earning cashback and paying interest.

Rock and hard place comes to mind. If I needed any persuasion to ditch the card then that is it. But I didn't!

Many thanks again.

EachPenny

YorkshireBoy wrote: »

I settled the account to £0 on Friday 9/12/16. Cashback was paid the same day. The CSA put the request on to formally close over the weekend, and assured me the fee wouldn't charged. I diarised to check the £3 fee wasn't subsequently added, and it wasn't.

I just wanted to say thanks again for the tip YorkshireBoy. And also to confirm that the arrangement still works.

The CSA has said they put a block on the card so no further fees will be charged (but no new purchases either) and once the cashback has been credited arrangements can be made for this to be paid into a current account. All seems very efficient and helpful. I expect to be posting a further update in a few weeks time to say that it didn't quite work out that way in reality Only joking, I love you really Santander

phillw

EachPenny wrote: »

The end of the interest free period is a bit of a trap - all I've had from Santander is some smallprint on my last statement which didn't really make it clear what I needed to do.

All the 0% cards I've had have been equally useless.

You need to clear the entire balance of the statement before the 0% runs out to be guaranteed that you won't pay any interest (the 0% period isn't necessarily in sync with the statement billing period). A couple of times I've phoned up around the time the 0% runs out to pay & to setup a direct debit to pay the full amount. At the end I ask them to confirm I won't be charged any interest and they've said that I would & I have asked to explain why and said that it wasn't clear and they've refunded the interest. They say they'll only do it once & it's not worth relying on.

EachPenny

phillw wrote: »

You need to clear the entire balance of the statement before the 0% runs out to be guaranteed that you won't pay any interest

Thanks phillw. I'm actually going to pay the entire balance down to £0 a few days early and then wait for the cashback to be paid into the account.

Thinking about things after my last post on this thread, the CSA I spoke to said that while there is credit on the account it won't be closed. It will just sit there with a blocked card and no fees to pay. Which got me thinking... if there is no fee, then why do I need to bother closing the account?

My objectives in downgrading the account rather than closing it were to maintain my credit utilisation level and average account length. If the card is effectively dormant then hopefully this will achieve the same thing - if a downgrade route had been possible then I wouldn't have used the card anyway. No difference.

Added to which I still have a 123 credit card (no longer available to new customers) with a relatively generous cashback deal if my spending increases in future.

I'm sure there will be a limit on how long Santander will allow me to keep a small amount of credit on an otherwise dormant credit card account... but I'm just a little bit curious to see what happens. I don't think I have anything to lose

So now I'm just going to wait here for someone far more knowledgeable than I am to come along and shatter my dreams

theburningcat

I applied for a card from MBNA. No fee and I got 3x the limit of my 123 card (more than sufficient as a backup as my Amex charge card is my card of choice). I'm also a bit confused about how closing it down would actually work, though. I paid just under the full balance last month and the remaining amount a few days after the due date so I am expecting to have to pay a small amount of interest but less than the cashback.

The cashback will be a tiny amount and I'm not hugely bothered about it. Should I call them after clearing the remaining balance and ask for them to schedule its closure for a day before the card fee date, stating that there will be a small credit balance due to the cashback and they can do with it what they want?

EachPenny

theburningcat wrote: »

I applied for a card from MBNA. No fee and I got 3x the limit of my 123 card (more than sufficient as a backup as my Amex charge card is my card of choice). I'm also a bit confused about how closing it down would actually work, though. I paid just under the full balance last month and the remaining amount a few days after the due date so I am expecting to have to pay a small amount of interest but less than the cashback.

The cashback will be a tiny amount and I'm not hugely bothered about it. Should I call them after clearing the remaining balance and ask for them to schedule its closure for a day before the card fee date, stating that there will be a small credit balance due to the cashback and they can do with it what they want?

The excellent advice from YorkshireBoy and my own experience is the best way is to call Santander and ask to have a 'block' put on the card. This will stop further fees being charged (ask them to confirm this point). Then make sure you have paid everything you owe (well) before the last day of 0% - i.e. the balance on your online banking shows £0.

This also means checking the 'pending' transactions and also thinking if there is anything else you have spent on the card recently which is not yet showing up.

My understanding of the T&C's and the advice from Santander (as per my previous post) is that once the block is on the account you will not pay any further fees. The only negative of not closing the account is you will have some unused available credit - unless that is a problem there seems to be no other reason to immediately close the account, and you could possibly request a credit limit reduction if you are concerned. You can then close the account at leisure if you want.

As far as interest goes, I'm stil trying to get my head around it, but I would try and avoid having any balance on your card by the end of the 0% day... if my understanding is correct then interest will be charged on any purchases you made in the 'final' month from the transaction date to the day the balance is fully repaid. With the high APR on the card this might add up to quite a bit and can be easily avoided by making sure you repay the full balance on time.

I was also told the card cannot be closed if it has a credit balance on it - so if your cashback is credited before the date you want to close the account down then you will have to positively do something with the cashback. I'm not sure if Santander will simply allow you to forget about it. (but that does only apply if the cashback is already credited, otherwise account closure will mean the cashback is lost).

theburningcat

I called them to put the block on. They confirmed that the block simply stops you being able to charge anything new to the card and stops the monthly fee - nothing else. Somehow the rep wasn't able to tell me if interest had accrued since my last statement date and also tripped up far too many times trying to read me the conditions for the block. Glad I'm free from Santander's credit card team!