Credit Card "cash fee" and interest charged for paying a government department.

catchpoler

I recently used my credit card to pay the Probate Fee of £273 and ordered ten copies of the grant for an extra £1.50 each. A total of £288.  I was astonished to see that Lloyds Bank charged me a 5% "cash fee", £14.40, for this payment and charged interest from day one. On the one hand I can't believe that just buying something from the government with a credit card is regarded as buying "cash" .  If this is the norm and all credit cards charge you extra for buying something from the government then I am astonished that there isn't a warning emblazoned on the government web site saying that paying by credit card will incur additional charges as if you were withdrawing cash with your credit card. I would be interested to know the experience of others. Has anyone payed their car tax or other costs with a credit card and been charged a "cash fee" ?

WillPS

LBG are particularly keen on treating any government/state fees/taxes as cash. You're not the first to fall foul of this. Other lenders are not nearly so restrictive, hence there being no warning.

Many government departments don't allow payment by credit card at all, I'm sure VED was one of them (although I haven't paid it myself in years so can't be sure).

My advice would be to call, explain and see if they will remove the fees. You could perhaps complain too if you don't feel the Terms & Conditions are clear enough on this (I haven't read them so I can't comment on how clear or not they are on this).

catchpoler

Seems paying for this government service, Probate Application, falls under Lloyds Bank's 

• Paying government or court fines, enforcement penalties, fees or costs

which is a bit rich. The transaction type on my statement is shown as "fines" which it isn't so I think I am going to pursue them on this one.

Grumpy_chap

Is it a personal credit card or a business credit card?

IIRC, paying VED has no fees if using a personal CC, but there are fees if using a business CC.  Is it possible something similar has occurred?

eskbanker

Grumpy_chap said:

Is it a personal credit card or a business credit card?

IIRC, paying VED has no fees if using a personal CC, but there are fees if using a business CC.  Is it possible something similar has occurred?

That's a different scenario, relating to the merchant levying a surcharge for paying by (some types of) card, whereas OP's issue is the card provider applying a cash transaction charge.

dr_adidas01

Grumpy_chap said:

Is it a personal credit card or a business credit card?

IIRC, paying VED has no fees if using a personal CC, but there are fees if using a business CC.  Is it possible something similar has occurred?

It’s nothing to do with the government charging for using a credit card. 

It’s that Lloyds have classed the transaction made on a government website as a cash like transaction, hence the charge of £14.40 plus interest from day one on the transaction made. 

The_Urbanite

For many years this wouldn’t have been considered a cash advance. But we didn’t have Curve allowing people to deposit to government savings accounts with a credit card to the tune of thousands of pounds a day.

What was going on got the backs of the credit card issuers up and now they’re categorising more merchant types as cash advances.