What counts as a "purchase"?

TheCorporateShrew

I have a HSBC 0% on purchases for 22 months credit card.

I'm in the process of buying a property.  

The solicitor needs a payment in advance for searches, and I plan to also pay their fees with this credit card (depending on answers here).

Will these payments be classes as purchases?  Or does this stray into advances territory?  In which case, I'll more likely switch to using savings.

Thanks.

WillPS

Depends on the MCC used by the merchant and how HSBC treats that MCC.

If you ask the merchant what MCC (or "merchant category") their credit card terminal uses, you can then check with HSBC whether or not it will be treated as a purchase.

My guess is it'd probably come under "Professional Services" and I'm pretty sure that HSBC don't charge for that, but please don't take my word for it.

DullGreyGuy

It is likely to be considered a purchase of services... your only risk when you pay by handing your card over is if it is considered a cash like transaction but that's typically limited to things like buying foreign cash, paying fines, possibly buying gift cards etc. 

In the UK it's done on a fairly crude basis of the merchant's ID number and what they've been mapped to. A company can have more than 1 ID but one transaction can only go on 1 ID so if you buy your weekly groceries and include a gift card in that transaction it'll go via the standard groceries ID and no cash like transaction fee for the gift card. 

WillPS

DullGreyGuy said:

It is likely to be considered a purchase of services... your only risk when you pay by handing your card over is if it is considered a cash like transaction but that's typically limited to things like buying foreign cash, paying fines, possibly buying gift cards etc. 

In the UK it's done on a fairly crude basis of the merchant's ID number and what they've been mapped to. A company can have more than 1 ID but one transaction can only go on 1 ID so if you buy your weekly groceries and include a gift card in that transaction it'll go via the standard groceries ID and no cash like transaction fee for the gift card. 

It's not limited to those things at all. We've had reports of Museum Entrances being charged (correctly) using a 'Government' descriptor MCC and LBG then charging a cash advance fee on that as if it was a tax payment. The OP should check, 'professional services' is a grey area.

TheCorporateShrew

WillPS said:

DullGreyGuy said:

It is likely to be considered a purchase of services... your only risk when you pay by handing your card over is if it is considered a cash like transaction but that's typically limited to things like buying foreign cash, paying fines, possibly buying gift cards etc. 

In the UK it's done on a fairly crude basis of the merchant's ID number and what they've been mapped to. A company can have more than 1 ID but one transaction can only go on 1 ID so if you buy your weekly groceries and include a gift card in that transaction it'll go via the standard groceries ID and no cash like transaction fee for the gift card. 

It's not limited to those things at all. We've had reports of Museum Entrances being charged (correctly) using a 'Government' descriptor MCC and LBG then charging a cash advance fee on that as if it was a tax payment. The OP should check, 'professional services' is a grey area.

Thank you.  I'm now leaning towards paying with savings.  Ultimately, it is what I saved for, and a gift from a family member means I can spend a chunk of the savings on these expenses as opposed to the deposit, and avoid some unneeded credit card debt.  It just leaves my emergency fund a little low, which is why I'm hesitating.

WillPS

I think that's probably safest. Use the 0% Purchase offer to build up a little buffer if needs be - you can buy gift cards from supermarkets if you need to bring this spend forward.

It's so rare nowadays you actually need cash, if you had none but a credit card with 0% purchases you could survive a fair while I reckon.

CliveOfIndia

TheCorporateShrew said:

WillPS said:

DullGreyGuy said:

It is likely to be considered a purchase of services... your only risk when you pay by handing your card over is if it is considered a cash like transaction but that's typically limited to things like buying foreign cash, paying fines, possibly buying gift cards etc. 

In the UK it's done on a fairly crude basis of the merchant's ID number and what they've been mapped to. A company can have more than 1 ID but one transaction can only go on 1 ID so if you buy your weekly groceries and include a gift card in that transaction it'll go via the standard groceries ID and no cash like transaction fee for the gift card. 

It's not limited to those things at all. We've had reports of Museum Entrances being charged (correctly) using a 'Government' descriptor MCC and LBG then charging a cash advance fee on that as if it was a tax payment. The OP should check, 'professional services' is a grey area.

Thank you.  I'm now leaning towards paying with savings.  Ultimately, it is what I saved for, and a gift from a family member means I can spend a chunk of the savings on these expenses as opposed to the deposit, and avoid some unneeded credit card debt.  It just leaves my emergency fund a little low, which is why I'm hesitating.

That's probably the safest.  These situations are always something of a grey area.  Buying groceries from Tesco - classed as a purchase, no question.  Buying foreign currency - always classed as a cash advance (with a few exceptions, such as using an M&S card to buy from an M&S bureau).  Professional services - has the potential to bite you on the backside, depending on the particular card.

If you have the option of using savings, that would be the safest way.  How about you then use your 0% card for everyday purchases, pay just the minimum each month whilst using the "spare cash" to rebuild your savings?

Obviously you need to then pay off the card when the 0% rate expires, but the net result is almost the same (if you'd used the card to pay the legal fees, you'd still need to repay it in full at the end of the promo period).

amanda1024

WillPS said:

It's not limited to those things at all. We've had reports of Museum Entrances being charged (correctly) using a 'Government' descriptor MCC and LBG then charging a cash advance fee on that as if it was a tax payment. The OP should check, 'professional services' is a grey area.

Wow - I hadn't realised that about museums. Is there any way to know in advance which will treat it as cash?