Credit cards: what issues should MSE be raising with the industry?

MSE_James

Hi all

Here at MSE we sometimes have the opportunity to talk to industry bodies, and one of our colleagues will be talking to representatives of lenders very soon.

We've already scoured the forum to spot recurring issues that would be worth highlighting, but if you've had a recent experience of dealing with a credit card provider that you'd like to add to the mix, please reply here.

If you've had a problem, what could the card provider have done differently to resolve the issue?

KxMx

My comment is about the application process. 

Some lenders have "disabled" as an option, but this doesn't appear to be industry standard, and I think it should be.

Often the next most appropriate option is "unemployed" which isn't attractive to lenders, despite some disabled peoples income being higher than that of someone unemployed

Brie

Bills need to clearly state what balance or money transfers have been done, what the balance is, and when the deal ends.  It would also help to know and have stated clearly what effect purchases made while you have a offer in progress will do to the account.

Case in point....MBNA I think is fairly clear that if you have a 0% offer running of which you've taken advantage then it's not a good idea to use the card to purchase anything as you'll be charged interest on the purchases if you don't clear your balance to zero including the portion that is the transfer.  So there's no benefit to using the card for both a transfer and purchases.  Additionally they very neatly outline when transfer offers you are using, how much is outstanding and when the offer ends and the money needs to be paid back in full to avoid being charged interest.

M&S on the other hand is a bit of a nightmare.  There is nothing on their statements to say if you have taken advantage of a 0% transfer offer, how much the balance of that is or when it started or will end.  If you ask their customer service some of them will tell you not to use the card for purchases at the same time due to interest being charged while in fact the transfer is completely separate to the purchases done on the card and you can do both and just pay the purchases off by the due date.  The problem though is you don't know how much you have to pay because you don't know how much of the balance transfer deal remains.  This is not helped as well due to M&S being very unclear how they deal with returns or other credits to your card account.

I've given up on stoozing (no need any more) but used to do BTs on my M&S card regularly.  And had to contact them every month to find out how much I had to pay to avoid paying interest.  I'd say about 1/3 of the time someone got the amount wrong either telling me I had to clear the entire balance or giving me a incorrect total for the purchases which resulted in me being charged interest.  And then complaining and them having to pay some compensation - which was nice.

Martico

You might find it worthwhile also asking this question on the debt-free wannabe subforum, where people are on the sharp end of all things credit

Dandytf

Ban Plastic Cards if they haven't already done so.
Increase Min repayments from day 1, Not everyone repays in full each time.
Promote Digital alternatives during Application.

ForumUser7

Dandytf said:

Ban Plastic Cards if they haven't already done so.
Increase Min repayments from day 1, Not everyone repays in full each time.
Promote Digital alternatives during Application.

I suppose more metal credit cards on the UK market would always be nice!

lr1277

The following might be a worldwide issue but perhaps the British credit industry can take a lead in solving it. By the way, I have never had this problem up till now buy may in the future.

In the forums it is suggested some car rental companies want embossed cards. With the trend  being towards flat cards this may present a problem. Can a solution be found where no retailer requires an embossed card?

I personally prefer the flat cards as I find them easier to read, especially when the embossed numbers have worn down so would not like to go back to embossed cards.

fergie_

Can you ask them about the increasing 'fees' for 'interest free' balance transfers. Some are around the 5% mark - potentially for less than a year. Are they really just front-loaded interest in another guise?

WillPS

I think more needs to be done to clarify and harmonise which merchants should and should not be treated as a 'cash like transaction'. We've had reports in these boards of museum admissions being treated as cash like transactions on the grounds that they are 'government charges' or similar.

The problem as I see it is two fold - on the first part, how is the consumer supposed to know reliably which MCC a merchant will charge their card against? Secondly - how might the consumer understand with any confidence whether or not that charge will be treated as a cash advance?

A solution to the first problem might be to get the issuers to agree a set of MCC codes which will be treated as cash. 

Stuart_W

I would echo @WillPS on some kind of standardisation of "cash like" transactions.

 I know I can pay my council tax bill or energy bill with my credit card and it is treated like any other purchase, but a friend has been charged "cash like" credit card fees for paying the same council and the same energy company, all because they have a different credit card.

Both our terms and conditions have references to "cash like" transactions but there is no way to know in advance whether a transaction counts as "cash-like".

MattMattMattUK

fergie_ said:

Can you ask them about the increasing 'fees' for 'interest free' balance transfers. Some are around the 5% mark - potentially for less than a year. Are they really just front-loaded interest in another guise?

Effectively yes they are, the fees have increased because overall the cost of borrowing has increased. 

On this I would like to a change so that the minimum payment must be high enough to ensure the balance transfer is cleared by the end of the interest free period, so on a one year interest free transfer the minimum payment must be 1/12th of the starting amount every month.