Anyone else had their Creation credit card cancelled without explanation?

jackjones01

Glavinwg said:

Like many others,  they informed me of the closure of my credit card,  having spoke with Creation I was told that a business devotion was made to pull out of the Credit Card Business.  So all their credit card customers will have been sent the same letter.

Is there anything official to say they are withdrawing from the credit card market. 

Venga

I have had the same from Creation this week, having used their card for years because of the zero foreign currency charges, and never failed to pay off in ful leach time.

WillPS

Just a quick reminder - there's an explanation of why paying in full might make you unprofitable rather than profitable on the top of page 6 of this thread:
22 November at 11:46PM

Scrounger

WillPS said:

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.

I've always paid my Creation cc bill by (cashback) card, same for the misses for the last 15 years - I mean, why wouldn't you?

Hope I've not hastened its demise 

Excellent post btw @WillPS


Scrounger

CaptainA1

The same happened to me, after many years of typically spending over £1K per month and paying off in full, my card has been cancelled. I put a poor review on Trust Pilot and immediately got a phone call apologising and stating that it was nothing to do with me but it was purely a 'comercial decision'.
As they are still advertising their Credit Card it looks like they only want customers who don't pay off monthly and run up credit. Much more profitable. Very poor form from Creation!

Volcane

Not a case of not wanting customers who pay in full, they are exiting the UK credit card market so NOBODY will have a creation card in a few months.

Scrounger

Volcane said:

Not a case of not wanting customers who pay in full, they are exiting the UK credit card market so NOBODY will have a creation card in a few months.

Notwithstanding my earlier post, as yet we haven't been told that our Creation cards are closing.

How do the let you know?

Hopeful that we've 'slipped through'    


Scrounger

suesh

I only used my Creation card for overseas spending. Looks like my Nationwide card will be just as good for that. Interesting to read all the posts on this. They could have been clearer on the reason for the account closure.