Credit Card Fees for Exceeding Credit Limit

samwardill

Why do some banks still have fees for exceeding credit limits in their Ts & Cs. These fees are totally anachronistic. It previous times they were necessary because people could make payments without pre-authorisation. These days all payments are pre-authorised. Therefore it is 100% within the control of the bank to keep credit within the credit limit. Surely banks should be paying the customer if the bank (irresponsibly) authorises a transaction that would take the customer over their agreed credit limit?

I just got charged a fee by HSBC. When I complained they paid it back. I kind of wish that it went to the FoS so that it could be challenged and maybe then they woudl change their policy.

TheSpectator

What makes you think FOS would uphold any complaint?

born_again

Wait till you do it again. Odds on they will not refund.

Funny people complain when transactions get declined.

But more telling is that transaction do not debit straight away, so you get plenty of time to make a payment before exceeding your limit 🤷‍♀️

Hoenir

Why has the bank got to take responsibility for all their customers actions ?  Surely the (legally enforcable) threat of a charge imposition should be enough to focus customers minds sufficiently to manage their own financial affairs. 

Fees do get refunded. Elephants don't forget though. 

retiredbanker1

...........,,,Why do you think it is ok to spend more than your allowed credit limit?
Even if the excess was caused by interest you should now roughly how much this would be every month.

Sorry but IMO they paid your fee back to get rid of you because it was less work for them.

eskbanker

samwardill said:

These days all payments are pre-authorised.

No, they're not.

And in any case, it's not necessarily a customer payment transaction that results in the limit being exceeded....

samwardill

TheSpectator said:

What makes you think FOS would uphold any complaint?

I might do it again so I can test! They said they would not refund a second time.

samwardill

retiredbanker1 said:

...........,,,Why do you think it is ok to spend more than your allowed credit limit?
Even if the excess was caused by interest you should now roughly how much this would be every month.

Sorry but IMO they paid your fee back to get rid of you because it was less work for them.

I absolutely don’t think it is ok to spend more than my allowed credit limit and it is totally irresponsible of a bank to authorise transactions that take me over this limit. They are far better placed than I am to prevent this happening.

MattMattMattUK

samwardill said:

retiredbanker1 said:

...........,,,Why do you think it is ok to spend more than your allowed credit limit?
Even if the excess was caused by interest you should now roughly how much this would be every month.

Sorry but IMO they paid your fee back to get rid of you because it was less work for them.

I absolutely don’t think it is ok to spend more than my allowed credit limit and it is totally irresponsible of a bank to authorise transactions that take me over this limit. 

Some smaller transactions are not processed instantaneously, I have noticed this with Tesco before, some transactions can still be processed offline, public transport such as TFL transactions are not processed until the end of the day/following morning, interest is applied to an unpaid balance etc. All those could take someone over their limit.

samwardill said:
They are far better placed than I am to prevent this happening.

You are in control of your spending, if you are not then you should not have a card.

samwardill

MattMattMattUK said:

samwardill said:

retiredbanker1 said:

...........,,,Why do you think it is ok to spend more than your allowed credit limit?
Even if the excess was caused by interest you should now roughly how much this would be every month.

Sorry but IMO they paid your fee back to get rid of you because it was less work for them.

I absolutely don’t think it is ok to spend more than my allowed credit limit and it is totally irresponsible of a bank to authorise transactions that take me over this limit. 

Some smaller transactions are not processed instantaneously, I have noticed this with Tesco before, some transactions can still be processed offline, public transport such as TFL transactions are not processed until the end of the day/following morning, interest is applied to an unpaid balance etc. All those could take someone over their limit.

I'm not quite sure how you think an individual can reasonably be expected to keep on top of this.

DullGreyGuy

samwardill said:

Why do some banks still have fees for exceeding credit limits in their Ts & Cs. These fees are totally anachronistic. It previous times they were necessary because people could make payments without pre-authorisation. These days all payments are pre-authorised. Therefore it is 100% within the control of the bank to keep credit within the credit limit. Surely banks should be paying the customer if the bank (irresponsibly) authorises a transaction that would take the customer over their agreed credit limit?

I just got charged a fee by HSBC. When I complained they paid it back. I kind of wish that it went to the FoS so that it could be challenged and maybe then they woudl change their policy.

You dont need to, you can see the Ombudsman's decisions on the matter like https://www.financial-ombudsman.org.uk/decision/DRN-4753049.pdf which didnt uphold the complaint and reiterated keeping within the limit is ultimately the responsibility of the customer. 

Plenty of payments still happen offline when networks are down etc