HSBC: "cash-related payment" fee charged when paid for broker subscription

Ulrich

DullGreyGuy said:

Ulrich said:

DullGreyGuy said:

molerat said:

It is 100% down to Freetrade as they are the only ones that are aware of the MCC in use, which will be the deciding factor on a cash transaction charge, ahead of you making a transaction.  I suspect the same code is in use for a subscription fee as there is for a purchase. As a rule of thumb never pay a financial institution with a credit card. 

It's not 100% down to them as it's HSBC that determines the terms of the card and which MCCs they are going to treat as cashlike. My AmEx card doesn't have a cash like transaction clause and so I would be able to buy the same subscription without the risk of a fee (assuming they take AmEx.

Its more nuanced that just not paying financial institutions, many people pay for their insurance by credit card and no one treats home insurance as a cash like transaction. 

Ulrich said:

They charged me 2.99% for making a "cash-related payment" using credit card.

Am I the only one that think it's crazy to treat such payment as cash-related? I don't get any of the money back, it's like a Netflix subscription.

And shouldn't Freetrade warn their customers trying to pay with a credit card that they may incur additional charges from a bank?
Yes, they have a FAQ article about that but who reads FAQ articles if it's just a payment and it normally doesn't matter if you use debit or credit card unless it explicitly says something like "you'll be charged XXX if pay with a credit card" at a payment page?

FreeTrade is an investment company as such buying investments with a credit card would be considered cash like transaction. They have chosen not to try and get a second MCC for their subscription services (or have and been told it will have the same MCC) which would enable card issuers to differentiate between investments and purchases of other services. 

There are thousands of card issuers in the world, many offer multiple different products with different T&Cs. It would be exceptionally difficult for any website to know how every single card issuer is going to treat their transactions and present various different warnings. With some card issuers their BIN are not very precise and so all the website will know is its a debit or credit card from X bank in Y country using Visa/Mastercard/AmEx network so wouldn't have the grain of detail to know if its their Gold card that has a 0.25% fee on all transactions or their Black card that is fee free. 

Do I get it right that TLDR is nobody but a customer is at fault for paying with a credit card?
Honestly, don't see a need for any website to differentiate between different types of products - it should display a warning IF it's a credit card, simples.

But then some debit cards charge fees, do they need a warning just for every single payment just in case? In which case doesn't it become pointless again because no one will read it or do anything with it just like the FAQs they already have but weren't read?

So what's your point exactly?
I wouldn't overcomplicate things - here's the official Freetrade FAQ article, and I think all they need is just put a warning and a link to the article if one is to pay with a credit card.

DullGreyGuy

Ulrich said:

DullGreyGuy said:

Ulrich said:

DullGreyGuy said:

molerat said:

It is 100% down to Freetrade as they are the only ones that are aware of the MCC in use, which will be the deciding factor on a cash transaction charge, ahead of you making a transaction.  I suspect the same code is in use for a subscription fee as there is for a purchase. As a rule of thumb never pay a financial institution with a credit card. 

It's not 100% down to them as it's HSBC that determines the terms of the card and which MCCs they are going to treat as cashlike. My AmEx card doesn't have a cash like transaction clause and so I would be able to buy the same subscription without the risk of a fee (assuming they take AmEx.

Its more nuanced that just not paying financial institutions, many people pay for their insurance by credit card and no one treats home insurance as a cash like transaction. 

Ulrich said:

They charged me 2.99% for making a "cash-related payment" using credit card.

Am I the only one that think it's crazy to treat such payment as cash-related? I don't get any of the money back, it's like a Netflix subscription.

And shouldn't Freetrade warn their customers trying to pay with a credit card that they may incur additional charges from a bank?
Yes, they have a FAQ article about that but who reads FAQ articles if it's just a payment and it normally doesn't matter if you use debit or credit card unless it explicitly says something like "you'll be charged XXX if pay with a credit card" at a payment page?

FreeTrade is an investment company as such buying investments with a credit card would be considered cash like transaction. They have chosen not to try and get a second MCC for their subscription services (or have and been told it will have the same MCC) which would enable card issuers to differentiate between investments and purchases of other services. 

There are thousands of card issuers in the world, many offer multiple different products with different T&Cs. It would be exceptionally difficult for any website to know how every single card issuer is going to treat their transactions and present various different warnings. With some card issuers their BIN are not very precise and so all the website will know is its a debit or credit card from X bank in Y country using Visa/Mastercard/AmEx network so wouldn't have the grain of detail to know if its their Gold card that has a 0.25% fee on all transactions or their Black card that is fee free. 

Do I get it right that TLDR is nobody but a customer is at fault for paying with a credit card?
Honestly, don't see a need for any website to differentiate between different types of products - it should display a warning IF it's a credit card, simples.

But then some debit cards charge fees, do they need a warning just for every single payment just in case? In which case doesn't it become pointless again because no one will read it or do anything with it just like the FAQs they already have but weren't read?

So what's your point exactly?
I wouldn't overcomplicate things - here's the official Freetrade FAQ article, and I think all they need is just put a warning and a link to the article if one is to pay with a credit card.

That many people may be exposed to fees by using a card to pay for a service, why do you think only you and your card should have a warning -v- everyone else? 

The fees are out of the control of FreeTrade and such warnings, which may be incorrect for many cards, do reduce business as it scares people off or they go down rabbit holes of trying to find out if it applies to them and never come back. They'll still get people complaining when they get other forms of fees applied and having warned some customers but not all puts them in a weaker position than had they no warning at payment stage.

You need to understand the rules of your own cards... if I'm buying overseas I use Starling as there is no FX fee, if I want to pay for something like this I'd use my AmEx card which has no "cash like" fee, for everything else at the moment its going on an VS card because I want a companion voucher for a flight.

Ulrich

For the sake of history updating the thread.
Did 2 things:
1. Complained to Freetrade pointing out they have done nothing to prevent since the last incident plus they technical issues that led to the incident.
2. Messaged HSBC and nicely asked to waive the fee and interest.

To the date HSBC called me back to say they are happy to refund the fee and interest but are unable to help with interest on interest or something like that if I'm happy with that. I was.