Santandar credit card

JandK2021

Hi looking for some advice  not sure if its just me that has come accross this or disagrees with this or if santandar are actually doing something wrong.

I opened a credit card with them to transfer a balance to it of £2000, the term was 18 month interest free.

The card also had a 3 month interest free period on purchases.

I made one purchase then transferred the  balance, then made some more purchases. 

During the 3 months interest free period i paid more money into the credit card than i purchased using it. After the 3 months ended they started to charge me interest.

I contacted them and asked why, i spoke to two different people who said a diffrent variation of this, but the money paid in is attributed to the highest interest balance first, as both balances were 0% interest it was split between them rather than attributed to the balance that will accrue interest first.

I dont dosagree with this but what i do disagree with is no where on there website or statements do they let the customer see what the purchase balance is and what the transfer  balance is, it is all one balance. Santandar also dont offer their customers anyway to attribute the money they are paying to either balance.

By not telling customers what their purchase balance is and not letting the customer pay money directly to any one account is a sneaky loophole helping them charge / allowing interest to accrue.

I appreciate this is alot to take in but is what they are doing right? 

[Deleted User]

Yes, it's fine.  It's all laid out in their key facts.

No lenders allow the customer the choice of where to allocate payments as they a) have to stay within regulations and b) can't micro manage accounts to that level.

JandK2021

Thanks for the reply, not allowing lenders to direct payments seems like a good way of accruing interest from them to fill their pockets.

Thanks for the info

[Deleted User]

 JandK2021 said:

not allowing lenders to direct payments seems like a good way of accruing interest 

It's the opposite. Lenders always direct payments, for the reasons above. It's too expensive and complex for them not to.

JandK2021

I beg to differ, if there are 2 balances on the card which the customer doesnt know the amounts of, when the interest free period ends it guarantees them the ability to charge interest. The only way to not be charged interest is 1, clear the purchase balance (which the customer doesnt know), 2, clear the whole balance (which i cant do otherwise i wouldnt of transferred to the card for 18 months interest free if i could clear it in 3 months)

[Deleted User]

You're begging to differ with something I didn't say.

I said that the lender allocates the payments, not the customer. Payments are always allocated according to the payment hierarchy.

Nebulous2

We often recommend not mixing BTs and purchases on the same promotional rate card for precisely that reason, it is complicated to manage. 

Any payments made now will go to the purchases, so get them paid off. Looking at your statement of estimated interest for next month, using the interest rate and calculating from that should get you close to how much you still have left on purchases.

Fighter1986

Once the purchase balance starts accruing interest, Santander allocate your payments towards that balance first, as they are obliged to do so as per UK Regulations.

I agree with your gripe regarding the lack of transparency over which balances your payments are being allocated to while both are in an interest free period, it makes it impossible to ensure any purchases made within the first three months of opening the account don't incur any interest unless you clear the entire account balance ... therby defeating the point of having an 18 month balance transfer offer.

You might wish to raise this as a formal complaint with Santander and ask them if they would consider a goodwill gesture in light of the lack of transparency. They haven't done anything contractually wrong, so they wouldn't be obliged to compensate you but I think in this instance it merits at least asking - via the official complaint route. 

JandK2021

Thanks for the replies, i went through santandar complaints process before i came here, they werent interested and kept saying see T&C's. I have now received their "once in a lifetime good will gesture" to refund the interest of the first month. 

The interest was minimal, so the gesture seems lost on me. It was more about the hidden balances within the interest free period that could catch someone else out and be alot worse for them if they made more significant purchases.

I now know the purchase amount i have to pay off to stop the interest, so i will clear that and pay off the card asap. I will also be moving the current account i have had with them for 5 years.

[Deleted User]

JandK2021 said:

Thanks for the replies, i went through santandar complaints process before i came here, they werent interested and kept saying see T&C's. I have now received their "once in a lifetime good will gesture" to refund the interest of the first month. 

The interest was minimal, so the gesture seems lost on me. It was more about the hidden balances within the interest free period that could catch someone else out and be alot worse for them if they made more significant purchases.

I now know the purchase amount i have to pay off to stop the interest, so i will clear that and pay off the card asap. I will also be moving the current account i have had with them for 5 years.

There is no hidden balance, the only people caught out are those who don't read the terms and conditions.

Unless you have a good reason, like a switching bonus, moving accounts is petty and meaningless, your gesture will be completely missed

chistery

Some like Barclaycard probably would have allocated payments to the purchase first.

If you have more than one promotional balance at the same interest rate, we’ll use your payment to reduce the balance with the promotional rate that ends first