Cash fees on credit cards

bootneck8901

I spotted a "Cash Fee" on my credit card today when checking recent transactions...of course I never draw cash and I always pay my card IN FULL  so I was perplexed

I phoned my card provider (Halifax)

They explained it was the fee element of paying a £100 fine (Speeding...35 in a 30) so be aware as you'll incur interest charges.  Halifax have reversed the fee and supressed the interest so no harm done.

They said it's common this time of year with people putting money on their kids cards as Christmas presents.....so watch out for it.

They advised me to use a debit card for such transactions in future.

hope this helps someone .

Merry Christmas

CliveOfIndia

bootneck8901 said:

They explained it was the fee element of paying a £100 fine

It's always a bit of a minefield using a credit card to pay government departments.  Some will go through as a standard purchase, some will be treated as a cash advance, and it's not always easy to determine beforehand how a particular transaction will be treated.

bootneck8901 said:

Halifax have reversed the fee and supressed the interest so no harm done.

That's very good of them - they were under no obligation to do so.  Top result

bootneck8901 said:

They said it's common this time of year with people putting money on their kids cards as Christmas presents

I'm not sure I see the connection between a speeding fine and putting money on cards.  But yes, if you're using a credit card to top up a prepayment card of some description, that will more often than not be treated as a cash advance (which probably is not surprising).

bootneck8901

The frustrating part is there was no warning (that I saw)  that a £5 fee would be added and that it would be treated as a cash fee.

Luckily I checked my card account and caught it before the end of month when interest would have been applied.

As you say it's a minefield, hence I am trying to help others not get caught paying interest if they don't need to...Martin would never forgive me

As for them dealing with it well when they weren't obliged to, they did comment that I have been a client since 2001 so that plainly counts for something,with them.

CliveOfIndia

bootneck8901 said:

The frustrating part is there was no warning (that I saw)  that a £5 fee would be added and that it would be treated as a cash fee.

You never do get a warning, unfortunately - it's only when the transaction is processed and the MCC code is identified that the system knows whether or not to treat it as cash.  Certain things are always treated as cash, such as buying foreign currency* or traveller's cheques, and these are usually noted in the T&Cs or on the back of your statement.

Gift cards are another oddity - buy them in with your grocery shop and they're treated as an ordinary purchase, buy them from a dedicated gift-card retailer and they're usually (though not always) treated as cash.  Yep, it's easy to get caught out.

* Even then, there is the odd exception.  Not sure if it's still the case, but it always used to be that if you bought foreign currency from an M&S bureau using an M&S card, there were no charges.  That is very much the exception though, foreign currency is pretty much universally treated as a cash advance (which makes perfect sense, I guess!).

bootneck8901 said:

As for them dealing with it well when they weren't obliged to, they did comment that I have been a client since 2001 so that plainly counts for something,with them.

That is nice to hear.  In my experience, if you've been a good customer for many years, most card issuers do tend to be pretty sympathetic to the very occasional oversight.  It's totally at their discretion, of course, but yes, they usually are pretty understanding.

DullGreyGuy

bootneck8901 said:

The frustrating part is there was no warning (that I saw)  that a £5 fee would be added and that it would be treated as a cash fee.

Luckily I checked my card account and caught it before the end of month when interest would have been applied.

As you say it's a minefield, hence I am trying to help others not get caught paying interest if they don't need to...Martin would never forgive me

As for them dealing with it well when they weren't obliged to, they did comment that I have been a client since 2001 so that plainly counts for something,with them.

There is no provision in the payments process for a warning to be given. 

The website you complete the details on is either controlled by the merchant or by the merchant services company. They will have no idea of the terms and conditions that applies to your personal card. Which ever card you used seems to have a "cash like" clause, my AmEx by comparison has no such clause. The merchant themselves cannot determine what your bank is or isn't going to charge you.  If you look at other countries, every transaction may come with a small fee.

It would be possible, theoretically, for the card networks to agree a system where the card issuer can push a warning and the merchant can display it, eg cash advance or FX fees etc, however because these things have to work multinationally its almost certainly going to be considered discretionary on if either the issuer or merchant wants to spend time/money developing their systems to support such messages. Since the fees the networks charged, other than AmEx, are capped they dont even have the normal stick/carrot of threatening merchants with higher fees if they dont implement it. 

The general rule of thumb is if you are buying a product or a service its likely to be considered a purchase, if you are effectively buying cash or paying a fine, taxes etc then thats going to be consider cash but there are nuances as a gift card from a gift card specialist has a reasonable risk of being considered cash but a gift card bought alongside your weekly grocery shop won't be. Council Tax is one where you are, more or less, buying a service despite it being called a tax whereas paying over your VAT isn't because the VAT money was never yours, you've just collected it on behalf of HMRC and passing it over.