Credit Card Fees for Exceeding Credit Limit

MattMattMattUK

samwardill said:

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.

Using their brain, the same as all the other individuals who do manage to keep on top of not exceeding their credit limit.

nyermen

Preauthorisations often drop off before they're claimed.  Banks have to balance how long to hold the preauthorisation (what if the money is never claimed/released?).

Example: A pre-order for something (eg. an iPhone) - if not claimed within x days (depending on bank), bank may release the balance hold (and often we get people here complaining when this doesn't happen reasonably).  Then a few days later Apple goes "yoink".  BUT - who forgets they've pre-ordered an iphone at - what - 1200 quid or so, in a week?

When I travel, hotels always pre-auth but often it doesn't release when I pay (even when they use the preauth correctly, i've watched), leaving me with potentially 1000GBP+ unavailable for at least a week or two (thats HSBC) until it finally releases.  I just have to manage that in wider use.

That said - backing part of OP's point - I'm not going to judge anyone's credit card balance / usage - and i think if someone goes a tiny amount over (oops I didn't realise that TFL charge took a few days to show) that shouldn't be subject to a charge, indeed, monitoring it all could for an active account, be tricky.  Bit different to a large amount over, which people should be responsible for monitoring.  
My local BP garage several times in the last 5 years seems to have payment processing issues - thats a payment in person with card that shows up a week or even 2 weeks later on the statement (with transaction date 2 weeks earlier than posting date...).

TheSpectator

samwardill said:

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.

It's never been easier with online access. You have access to a calculator or spreadsheet?

Or if it's too difficult for you stay well away from your credit limit....spread your spending over more than one card. It's not rocket science.

And vexatious complaints such as proposed by you should be charged on you if you fail imo. All cc companies have an over limit fee, I think the FOS would have intervened by now if they thought them unfair (which they don't)

Nasqueron

nyermen said:

Preauthorisations often drop off before they're claimed.  Banks have to balance how long to hold the preauthorisation (what if the money is never claimed/released?).

Example: A pre-order for something (eg. an iPhone) - if not claimed within x days (depending on bank), bank may release the balance hold (and often we get people here complaining when this doesn't happen reasonably).  Then a few days later Apple goes "yoink".  BUT - who forgets they've pre-ordered an iphone at - what - 1200 quid or so, in a week?

When I travel, hotels always pre-auth but often it doesn't release when I pay (even when they use the preauth correctly, i've watched), leaving me with potentially 1000GBP+ unavailable for at least a week or two (thats HSBC) until it finally releases.  I just have to manage that in wider use.

That said - backing part of OP's point - I'm not going to judge anyone's credit card balance / usage - and i think if someone goes a tiny amount over (oops I didn't realise that TFL charge took a few days to show) that shouldn't be subject to a charge, indeed, monitoring it all could for an active account, be tricky.  Bit different to a large amount over, which people should be responsible for monitoring.  
My local BP garage several times in the last 5 years seems to have payment processing issues - thats a payment in person with card that shows up a week or even 2 weeks later on the statement (with transaction date 2 weeks earlier than posting date...).

If banks start setting tolerance limits, it'll just mean the people that live close to the edge and push their luck just push it further. It's like when they set the motorway speed limit to 70 and people do 80-90, and people talk about putting it up to 80 which means people will do 90-100. It's a hard limit - don't spend more than you can afford, use another card etc

DullGreyGuy

nyermen said:

Preauthorisations often drop off before they're claimed.  Banks have to balance how long to hold the preauthorisation (what if the money is never claimed/released?).

It's simply an authorisation, not a "pre-authorisation". Technically there is no requirement for authorisation to occur, in principle they could go straight to collection but that will vastly increase the fees they must pay and increases the risk of collection failing because of insufficient funds etc. 

nyermen said:
i think if someone goes a tiny amount over (oops I didn't realise that TFL charge took a few days to show) that shouldn't be subject to a charge, indeed, monitoring it all could for an active account, be tricky.  Bit different to a large amount over, which people should be responsible for monitoring.  

My local BP garage several times in the last 5 years seems to have payment processing issues - thats a payment in person with card that shows up a week or even 2 weeks later on the statement (with transaction date 2 weeks earlier than posting date...).

whats a "tiny amount"? £5 

All that basically means is you have a credit limit of £10,005 rather than £10,000 and you will find someone comes along and takes their balance to £10,006 and then argues they are only a tiny bit over the the no charge limit again. 

A single strong line with a 1 strike allowance is better than creating ever shifting shades of grey which means you're forever giving more grounds as you smudge the line and people then argue you should smudge it again for being a tiny bit over the tiny bit over the tiny bit

booneruk

samwardill said:

MattMattMattUK said:

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.

I've been a credit card user for decades and never had a problem. You're more likely to run into trouble if you run near the limits I guess.

booneruk

DullGreyGuy said:

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 

Mr L sounds as if he should see the lighter side of things. I fear for his blood pressure

DullGreyGuy

booneruk said:

DullGreyGuy said:

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 

Mr L sounds as if he should see the lighter side of things. I fear for his blood pressure

That could go for a significant proportion of the those that escalate to an ombudsman

surreysaver

Not all payments are pre-authorised. Public transport being an example