Penalised for paying off card each month by DD 6 July 2022 at 9:40AM edited 7 July 2022 at 8:36AM in Credit cards 23 replies 1.6K views

jamiemacbid

If I pay off my Lloyds Cash back Credit card in full each month by DD (sometimes >£10k in a month), Lloyds block my card for a few days at the of each month whilst they wait for the DD to clear.  Yet they happily increase my monthly credit limit above £10k.

Seems like a blatant attempt to discourage me from paying off my card each month!?  Anyone else had this issue?

[Deleted User]

This should not be an announcement and should be on the main CC board

However, the volume / value of payments maybe is what is spooking them. Maybe have a chat with them about this given what you are spending 

nyermen

When you say block, do you mean they dont clear the balance (and the available to spend doesnt change) or actually block (rejected if you try to use the card within its limit)?

May be some strange Lloyds thing because you've gone over 10k (the theoretical AML line in the sand), I've not had the issue myself (non lloyds card) when my repayment has been high due to company travel expenses.

[Deleted User]

nyermen said:

When you say block, do you mean they dont clear the balance (and the available to spend doesnt change) or actually block (rejected if you try to use the card within its limit)?

May be some strange Lloyds thing because you've gone over 10k (the theoretical AML line in the sand), I've not had the issue myself (non lloyds card) when my repayment has been high due to company travel expenses.

The Lloyds card gives 0.5% cashback over £4000 spend (0.25% up to) so spending 10k a month is pretty good income but if Lloyds are being funny about it it would probably be best to speak to them. I doubt anyone on this board but OP spends this much on this specific card so getting solid advice is going to be impossible

jamiemacbid

Thanks Nyermen and Farfetch When I say block, I mean it gets rejected if I try to use it during that monthly clearing period.  Obviously a nice issue to have (who has 10k to spend monthly) but also annoying when I am using it for everything which I generally want to do in order to earn the cash back.

I go back to my original question about the ethics of offering a credit limit higher than this clearing limit, should that be allowed? Shouldn't they tell you that their product is limited in this way? I have made a complain to Lloyds, but also wanted to see if anyone else has come across this?

jamiemacbid

Apologies for making it an Announcement, how do I remove that tag?

mr_stripey

jamiemacbid said:

Apologies for making it an Announcement, how do I remove that tag?

I wouldn't worry about it mate. It is a failing of the forum if it allows anyone to do this - if they don't want people doing it then perhaps they should restrict the facility to do so to admins etc!

Brie

I don't understand what you mean by clearing limit.  

I do know that MBNA tell me that a payment is going through and that my use of the card may be restricted until it clears but on the basis that I may not have enough of a limit to spend anything.  

If you are normally using £10k a month and Lloyds offers you a credit limit of £12k then you'd always have the £2k wiggle room around DD time.  Not sure why that would be an issue for you.

jamiemacbid

Unless I want to spend more than 10k.. I.e. If doing a large purchase.

My point is I didn't know about this supposed 10k limit (Lloyds of course won't actually reveal what the limit actually is).  It's good that MBNA at least tell you!  If Lloyds provide a 12k credit limit then they should be able to set up so we dont get these dead patches each month.  

When I say clearing limit, I mean it appears that if the amount you are paying in to your Credit account is above a certain amount, they they stop you being able to do any more purchase until the funds have actually cleared with them. 

[Deleted User]

What is your actual credit limit? 

Can you not talk to them about the problems you are having and if they do have a hidden limit?

jon81uk

jamiemacbid said:

When I say clearing limit, I mean it appears that if the amount you are paying in to your Credit account is above a certain amount, they they stop you being able to do any more purchase until the funds have actually cleared with them. 

What do you mean by credit account? I thought you were talking about a credit card?

Are you paying the bill/statement by direct debit, or are you making a bank transfer to clear down the spend?