Credit card over limit fee

kimwp

Fighter1986 said:

kimwp said:

Mickey666 said:

How can a merchant charge for a bounced transaction?  If the card transaction doesn't go through then there IS no transaction - it's a simple no-sale.

I don't think it's quite as simple as that. The bank has put effort into that transaction, therefore they have incurred cost.

Nope, transaction fees are exactly that, fees for executed transacitons. There are no fees for attempted / failed transactions. 

Technically the bank did incur a cost, but you try putting a real-world figure on a few milliseconds of computer time and a few bytes of WAN data. It's beyond infinitessimal. 

Neither of us called it a transaction fee? Investopedia defines the fees for failed/bounced transactions as Returned Payment Fee.
The question was how can a fee for a bounced transaction be justified - it can be justified because some cost has been incurred. The bank needs to charge enough on all the fees it charges to cover all its costs and generate profit.

p00hsticks

Mickey666 said:

How can a merchant charge for a bounced transaction?  If the card transaction doesn't go through then there IS no transaction - it's a simple no-sale.

I  was thinking more along the lines of direct debits, where a mechant is given permission to request a payment but the money isn;t there - but as Grabs39 says, there is also the case of offline card transactions, where the merchant doesn't get a real time authorisation. In both cases the merchant is presumably owed money and has gone to some trouble to request it from the bank.

And some banks certainly charge 'unpaid transaction' fees if they decided to bounce a transaction that would take a person over their agreed overdraft limit.

My point is that if card issuers more widely introduced systems to prevent people going over their limit by rejecting transactions, as Mickey666 seems ti think would be a good idea, then most likely all that would happen is that the 'over limit' charge would be replaced by a 'bounced transaction' charge. The card issues still get their money, and the customer is no better off financially.

Fighter1986

DjangoUnchained said:

flashg67 said:

DjangoUnchained said:

write to them complaining and tell them you will take it to the financial ombudsman, ittl cost them hundreds, they will probably refund you. If they dont refund, and the ombudsman doesnt favour you at least youm have the satisfaction of costing them hundreds and wasting their time.

And who do think ultimately pays  the 'hundreds of pounds' it costs them every time someone does this. Plus the 'wasted time' is actually costing them an employee's salary - again, who do you think pays that? (if you haven't worked it out, it's us - customers...) Not good advice at all IMO

i disagree. I have no problem costing banks / cards money if they try and charge me what i feel are unfair and unreasonable fees. If they dont like it, they can decide not to do business with me, thats their choice. There are many other suppliers around. All this !!!!!! about everyone else having to pay for it is nonsense, look at the profits they make.
Back to the OP , the card issuers have all the technology to stop the customer going over the limit if they wanted to. if they are going to let him go over the limit they have no moral right to penalize him for doing so. If they want to enforce the penalty, then the customer has the right to appeal it, first with the card, then if they refuse then I hope he takes it to the ombudsman and costs them dearly. If more people did this we would all benefit for a better customer focussed experience.

No we wouldn't - look at Overdraft APRs.

All the morons who can't do simple addition and subtraction bouncing payments out of their bank accounts left right and centre, going into unauthorised overdrafts and generally having no grip whasoever on their financial life kept on at the ombudsman morning noon and night about bank charges, rather than taking some damn responsibility. 

So banks removed them, under order from the regulator, and instead decided to double / trible / quadrouple everyone's standard overdraft APR.

So rather than a few noisy idiots paying for their own crapulence; each and every bank customer is tarred with the same brush now having to pay exorbitant overdraft interest rates if they ever dare dip into an authorised overdraft.

[Deleted User]

Mickey666 said:

Of course the OP is to blame - I didn't suggest otherwise.  In fact, I explicitly stated that they probably have no rights, implying that the card company is within their rights as per the card contract.
I've no idea if the card company will call their bluff and nor do you.  But at least I've offered the OP a suggestion which may work.  If people don't kick back when things like this happen then we can all be sure that the companies concerned will not give any ground voluntarily.  If we do then they might.  It worked for me, even though I was clearly in the wrong, so it might work for the OP.  Or it might not.  But it's up to the OP to decide for themself.

A suggestion to blame the bank for the OP's mistake, that is literally what you wrote

Mickey666

Deleted_User said:

Mickey666 said:

Of course the OP is to blame - I didn't suggest otherwise.  In fact, I explicitly stated that they probably have no rights, implying that the card company is within their rights as per the card contract.
I've no idea if the card company will call their bluff and nor do you.  But at least I've offered the OP a suggestion which may work.  If people don't kick back when things like this happen then we can all be sure that the companies concerned will not give any ground voluntarily.  If we do then they might.  It worked for me, even though I was clearly in the wrong, so it might work for the OP.  Or it might not.  But it's up to the OP to decide for themself.

A suggestion to blame the bank for the OP's mistake, that is literally what you wrote

So what?  That's why the OP posted in the first place isn't it?  They surely KNOW they are in the wrong but they wanted advice on what they could do.  I offered some advice, that's all.  I wasn't pretending that the OP had any rights, more that it wouldn't do much harm in complaining that it was the bank's fault (whether it was true or not).  I offered my experience of a similar situation where the bank demurred.  it worked for me, it might work for the OP.  Nothing ventured, nothing gained.
No big deal.

born_again

p00hsticks said:

Mickey666 said:

How can a merchant charge for a bounced transaction?  If the card transaction doesn't go through then there IS no transaction - it's a simple no-sale.

I  was thinking more along the lines of direct debits, where a mechant is given permission to request a payment but the money isn;t there - but as Grabs39 says, there is also the case of offline card transactions, where the merchant doesn't get a real time authorisation. In both cases the merchant is presumably owed money and has gone to some trouble to request it from the bank.

And some banks certainly charge 'unpaid transaction' fees if they decided to bounce a transaction that would take a person over their agreed overdraft limit.

My point is that if card issuers more widely introduced systems to prevent people going over their limit by rejecting transactions, as Mickey666 seems ti think would be a good idea, then most likely all that would happen is that the 'over limit' charge would be replaced by a 'bounced transaction' charge. The card issues still get their money, and the customer is no better off financially.

A lot of people seem to think that your limit on your credit card or bank account is a solid brick wall that can not be passed. They scream blue murder when they are allowed to overspend, yet do exactly the same when a transaction is declined for the same reason.
Some banks will stop anything that takes you over your limit. But that tends not to be the norm, has come into play more now with the change in overdraft rates.
Banks like to give customers some freedom and with the ability now that you do not get charged for going over your limit, so long as the account is back in the black by the end of the day. More people do it to earn a bit of interest on their savings.

Also many people are not aware that if you have money in your account, then the bank can not stop you getting it. Even it it takes you over your limit.
So say you have £5 in your account, but the ATM only gives £10 then they have to let you take the £10. Which is also another reason why most banks have a buffer zone where you do not get charged for being overlimit.

Mickey666

born_again said:

p00hsticks said:

Mickey666 said:

How can a merchant charge for a bounced transaction?  If the card transaction doesn't go through then there IS no transaction - it's a simple no-sale.

I  was thinking more along the lines of direct debits, where a mechant is given permission to request a payment but the money isn;t there - but as Grabs39 says, there is also the case of offline card transactions, where the merchant doesn't get a real time authorisation. In both cases the merchant is presumably owed money and has gone to some trouble to request it from the bank.

And some banks certainly charge 'unpaid transaction' fees if they decided to bounce a transaction that would take a person over their agreed overdraft limit.

My point is that if card issuers more widely introduced systems to prevent people going over their limit by rejecting transactions, as Mickey666 seems ti think would be a good idea, then most likely all that would happen is that the 'over limit' charge would be replaced by a 'bounced transaction' charge. The card issues still get their money, and the customer is no better off financially.

A lot of people seem to think that your limit on your credit card or bank account is a solid brick wall that can not be passed. They scream blue murder when they are allowed to overspend, yet do exactly the same when a transaction is declined for the same reason.
Some banks will stop anything that takes you over your limit. But that tends not to be the norm, has come into play more now with the change in overdraft rates.
Banks like to give customers some freedom and with the ability now that you do not get charged for going over your limit, so long as the account is back in the black by the end of the day. More people do it to earn a bit of interest on their savings.

Also many people are not aware that if you have money in your account, then the bank can not stop you getting it. Even it it takes you over your limit.
So say you have £5 in your account, but the ATM only gives £10 then they have to let you take the £10. Which is also another reason why most banks have a buffer zone where you do not get charged for being overlimit.

I doubt anyone would moan about an overdraft 'buffer zone' in which you don't get charged either penalty or interest, even if it was, say, only for a week or two to give you the chance to correct any mistake.  But that has never been the case in all my decades experience of decades of banking.   Perhaps I've just been with the wrong banks?

born_again

Mickey666 said:

I doubt anyone would moan about an overdraft 'buffer zone' in which you don't get charged either penalty or interest, even if it was, say, only for a week or two to give you the chance to correct any mistake.  But that has never been the case in all my decades experience of decades of banking.   Perhaps I've just been with the wrong banks?

Most banks have a £10 or £20 buffer zone now.

But you will be surprised at what people moan about...

HSBC is a bit more generous.

>>An interest-free buffer for extra peace of mind

Most of our accounts (excluding Basic Bank Account) come with safety buffer of £25 or more. So if a payment takes you a few pounds overdrawn, you won’t face interest or charges.
<<

DjangoUnchained

Fighter1986 said:

DjangoUnchained said:

flashg67 said:

DjangoUnchained said:

write to them complaining and tell them you will take it to the financial ombudsman, ittl cost them hundreds, they will probably refund you. If they dont refund, and the ombudsman doesnt favour you at least youm have the satisfaction of costing them hundreds and wasting their time.

And who do think ultimately pays  the 'hundreds of pounds' it costs them every time someone does this. Plus the 'wasted time' is actually costing them an employee's salary - again, who do you think pays that? (if you haven't worked it out, it's us - customers...) Not good advice at all IMO

i disagree. I have no problem costing banks / cards money if they try and charge me what i feel are unfair and unreasonable fees. If they dont like it, they can decide not to do business with me, thats their choice. There are many other suppliers around. All this !!!!!! about everyone else having to pay for it is nonsense, look at the profits they make.
Back to the OP , the card issuers have all the technology to stop the customer going over the limit if they wanted to. if they are going to let him go over the limit they have no moral right to penalize him for doing so. If they want to enforce the penalty, then the customer has the right to appeal it, first with the card, then if they refuse then I hope he takes it to the ombudsman and costs them dearly. If more people did this we would all benefit for a better customer focussed experience.

No we wouldn't - look at Overdraft APRs.

All the morons who can't do simple addition and subtraction bouncing payments out of their bank accounts left right and centre, going into unauthorised overdrafts and generally having no grip whasoever on their financial life kept on at the ombudsman morning noon and night about bank charges, rather than taking some damn responsibility. 

So banks removed them, under order from the regulator, and instead decided to double / trible / quadrouple everyone's standard overdraft APR.

So rather than a few noisy idiots paying for their own crapulence; each and every bank customer is tarred with the same brush now having to pay exorbitant overdraft interest rates if they ever dare dip into an authorised overdraft.

precisely why customers need to complain. The banks/ card co.s have the ability to not let it go past the limit, For payments not done in real time as mentioned, they could easily set up a small buffer, obviously not big enough for blatant abuse,  therfore no need to penalise. 

kimwp

DjangoUnchained said:

Fighter1986 said:

DjangoUnchained said:

flashg67 said:

DjangoUnchained said:

write to them complaining and tell them you will take it to the financial ombudsman, ittl cost them hundreds, they will probably refund you. If they dont refund, and the ombudsman doesnt favour you at least youm have the satisfaction of costing them hundreds and wasting their time.

And who do think ultimately pays  the 'hundreds of pounds' it costs them every time someone does this. Plus the 'wasted time' is actually costing them an employee's salary - again, who do you think pays that? (if you haven't worked it out, it's us - customers...) Not good advice at all IMO

i disagree. I have no problem costing banks / cards money if they try and charge me what i feel are unfair and unreasonable fees. If they dont like it, they can decide not to do business with me, thats their choice. There are many other suppliers around. All this !!!!!! about everyone else having to pay for it is nonsense, look at the profits they make.
Back to the OP , the card issuers have all the technology to stop the customer going over the limit if they wanted to. if they are going to let him go over the limit they have no moral right to penalize him for doing so. If they want to enforce the penalty, then the customer has the right to appeal it, first with the card, then if they refuse then I hope he takes it to the ombudsman and costs them dearly. If more people did this we would all benefit for a better customer focussed experience.

No we wouldn't - look at Overdraft APRs.

All the morons who can't do simple addition and subtraction bouncing payments out of their bank accounts left right and centre, going into unauthorised overdrafts and generally having no grip whasoever on their financial life kept on at the ombudsman morning noon and night about bank charges, rather than taking some damn responsibility. 

So banks removed them, under order from the regulator, and instead decided to double / trible / quadrouple everyone's standard overdraft APR.

So rather than a few noisy idiots paying for their own crapulence; each and every bank customer is tarred with the same brush now having to pay exorbitant overdraft interest rates if they ever dare dip into an authorised overdraft.

precisely why customers need to complain. The banks/ card co.s have the ability to not let it go past the limit, For payments not done in real time as mentioned, they could easily set up a small buffer, obviously not big enough for blatant abuse,  therfore no need to penalise. 

Or. .....you set up your own buffer so you don't unintentionally borrow money that the bank has not agreed to lend you - similar to keeping some buffer funds in your current account so if you need something you didn't anticipate, you don't go into an overdraft or have the transaction refused. If your limit is £3000, tell yourself to only spend roughly to £2,500 (ie buffer of £500) and stop at that point or if you must, keep a VERY careful eye on spending if you exceed this. (Remembering it's a really bad idea to be this close on your available credit in the first place)