Anyone else had their Creation credit card cancelled without explanation?

WillPS

jameswyper said:

jackjones01 said:

If you pay off your card in full every month you’re not making them money. Also if you don’t use your card in X amount of time they’ll close it. 

They make money from interchange fees (what they charge the merchant) whether or not you pay the card off in full.  They may make more money if I carried a debt, but plenty of people pay off in full each month - I've done so on my John Lewis card for two decades - so it must be profitable enough. I've spent about £3000 on the card this year, which is not nothing.  And I last used it a month ago (the agreement says they can close it if it's unused for a year).

They make an absolutely tiny amount of commission from the interchange (which is charged by Mastercard to the acquiring bank, not Creation nor the merchant!).

The interchange that Mastercard can gather from UK spend on a Creation card is capped at 0.3%. You can safely presume the amount they pass on to Creation by way of commission is lower otherwise Mastercard would earn nothing.

If you do the sums, you'll quickly find that it is indeed impossible for Creation to make a profit on an unbranded, rewardless credit card presuming all spend is in the UK and paid in full, unless the cardholder spends *significant* amounts. Some costs to consider - card issuance (£5ish a time), receiving anything else in the post (£1 a pop, at least) - this is to say nothing of the harder to know costs involved in providing a service, backend and maintaining a float.

Oh, and just for fun - if the customer settles their bill by card, Creation will be charged far more than 0.3% by their acquiring bank. So absolutely zero chance of a profit.

Vanilla, non-cobranded, Visas and Mastercards are only viable if enough customers pay interest or incur other fees (like FX). That's the truth.

Your John Lewis card is viable because of the commission which John Lewis will pay NewDay when those cards are used at JLP outlets, and the preferential rate JLP will charge NewDay for reward redemptions.

WillPS

Gandalf644 said:

It wouldn't surprise me if Creation are exiting the credit card market totally.

After they lost ASDA and IHG as affinity partners a few years ago, there cannot still be many Creration credit cards knocking about (in proportion to other card providers). You haven't been able to take out a new credit card account with them for some time now.

The costs to service a relatively small number of credit card holders (many none or barely profitable as posted above) must be quite high.

They will probably concentrate on providing shop finance such as their tie up with Curry's etc.

I think this is on the money. They've been gradually shutting up shop since 2020. For a while only the basic/white IHG card was available - presumably to see out a contractual commitment.

This looks to me like they are entirely exiting the market.

FletcherFan

Same. Previously used as IHG card, but stuck with them when that link up ceased, usually average £2k per month on it.  I contacted them to confirm it wasn't a scam, ad asked for explanation. They basically said it was because they can (iaw clause 14)  which to me isnt a reason, its what theyve done (subtle difference)
Better go looking for another card then.....

gt94sss2

Creation are closing one of my two credit card accounts that I currently hold with them.

This is the second time they have closed a card I held with them like this.

The first was a few years ago. Not that I really use the cards - the one I did actively use was the one they closed previously.

Oddly, the one remaining card I have is my ex- IHG card which has the biggest credit limit of the 3.

MattMattMattUK

gt94sss2 said:

Creation are closing one of my two credit card accounts that I currently hold with them.

This is the second time they have closed a card I held with them like this.

The first was a few years ago. Not that I really use the cards - the one I did actively use was the one they closed previously.

Oddly, the one remaining card I have is my ex- IHG card which has the biggest credit limit of the 3.

It will probably be closed in the next month or two, they seem to be slowly working their way through all customers as they disengage from the credit card market in the UK.

Moggiesmum

I too had an email informing me that my creation credit card account was being closed.  I wondered what was going on as I always paid my balance in full each month.  Now reading all the posts I am somewhat relieved that I’m not the only one. It’s their loss.  I’ve already got a new card from a different company. 

Largs

I haven't had anything yet.  I do have a couple of things on "flex" with them, so maybe when they are paid off.  I will miss it for spreading the cost over three months for nowt.

BarnOwl1900

yep - mine too. Same thing happened to me years ago when Diners Club (remember them??)  decided to quit the personal cards business - but at least they were forthright about why they were dumping me (and all the other personal card holders)!

oldbuthealthy

What is upsetting people is the basically the fact that they used Clause 14, because they needed to give two months notice..  So technically they have followed a route that would end people's credit card.  The true fact that they are withdrawing from the market was not mentioned.  Thus resulting in anger.  Clearly Creation will need to make people redundant in that division and the budget pushed them over the edge.  The ramifications, having read some of the comments, means that there are people who cannot get a new credit card, whilst their information on credit score companies websites show that they already have a credit limit with Creation.  The only thing to do for them is to go to the credit score companies and get a note put on their record that Creation are withdrawing from the marketplace, problem being that Creation have yet to make it public.  So the best thing to do for them is to put in a formal complaint to Creation so that Creation can confirm their removal from marketplace to help their customers resolve future applications for a credit card.  Honesty from Creation would have put a stop to all this anxiety and confusion.

charleem_2

I had to contact them about a different issue and received notice today that they are indeed closing all of their UK credit card accounts.