Paying Credit Card Balance by Switch

jmk001

I have just spoken with MBNA about paying my VISA bill via switch. Previously, if a payment was made by 5.00 pm it was credited the next working day. They say that this changed in January 2008 due to "circumstances beyond our control" and categorically refuse to refund any charges incurred as a result. What changes have caused this? Have the banks stepped back in time and are now extending the timing of interbank transactions to their advantage? Beware of being caught out like this as MBNA claim to have notified all their customers both in revised terms and also by email and insist it's the customer's responsibility, not theirs. This is the 21st century and I can't believe the banks can be allowed to manipulate customers' money in this way! Please be warned that MBNA are extremely unsympathetic when this occurs and simply will say that you were warned and that it is on their website. Well excuse me MBNA but first of all if you happen to notice that it now takes 2 days to make a payment, it's already too late and secondly have financial transactions suddenly become more time-consuming to process??

cifpower

Have you thought of setting up a direct debit?

jmk001

I have, but the point of using switch was that it USED to take 1 day whereas a DD takes min of 2 days so by using switch I hold on to my funds a day longer. Not much I agree but it's a point of principle that I don't want the banks to have my money (or anyone else's) for any longer than is absolutely necessary. The other advantage of using switch is that I am in complete control so (at least in theory) no nasty surprises. The thing that worries me most is that the banks can just do this without giving a reason and maybe this is a trend that we may see more of as the banks seek to exploit different revenue streams post the credit crunch! Thanks for the thought, though.

YorkshireBoy

Unless you're on top of your game though (and by that I mean you read T&C's and changes to T&C's to understand how your account works), these "principles" can cost you money...as you have now found out.

After all, you have (around) 28 days in which to make your payment, and if you want to extract 'the maximum' then the ONLY safe way is to use direct debit.

It's a little like the people who grumble because they've gone into an unauthorised overdraft...despite having several hundreds (and possibly several thousands) of pounds in a linked savings account. If you're not on top of your game, then the additional £20 per year interest earned on £500 in the savings account will be less than one payment referral fee.

jmk001

I agree with you entirely YB, but if people don't have principles and stick up for them then it's always the greedy banks that benefit. Why should they have a penny more of my hard earned money than I absolutely have to pay them. You have to remember that these banks are dealing with BILLIONS and an extra day of YOUR money will earn them 10s of millions (possibly 100s) per year. I say don't let them get away with it.

YorkshireBoy

Missed this in your earlier post...

jmk001 wrote: »

...whereas a DD takes min of 2 days so by using switch I hold on to my funds a day longer.

No you don't.

DD both debits your account, and credits the recipients account as cleared funds, on the same day. All you have to do is make sure there are sufficient funds in your current account.

You can read up on how DD works here:

http://www.bacs.co.uk/BACS/Consumers/Direct+Debit/

Why should they have a penny more of my hard earned money than I absolutely have to pay them.

Then why not pay by DD?

...an extra day of YOUR money will earn them 10s of millions (possibly 100s) per year.

...but they don't get an extra day of MY money because I pay by DD. Also, since a major part of my pension and equity ISA depends on the performance of the banking industry, I'm happy for them to make money...just not from me!

jmk001

YB, I don't know who you pay by DD but MBNA told me that payments taken by DD are only credited to my C/C account on the 3rd working day after they are initiated. Maybe it's because MBNA are not a proper clearing bank or they just don't know the facts, but in any case I don't trust them.
BTW I couldn't see anything about the time it takes to transfer funds on the link you sent.

YorkshireBoy

jmk001 wrote: »

...MBNA told me that payments taken by DD are only credited to my C/C account on the 3rd working day after they are initiated.

What they say is true. They 'initiate' the request 3 days before the payment due date, but the money does not leave your current account (and hence does not arrive in the originator's account) until the payment due date...3 days later.

Maybe it's because MBNA are not a proper clearing bank or they just don't know the facts...

With respect, I think it is you who does not understand how it works. That's why I provided the link earlier. You'll have to click around within the site if you want to learn more.

...but in any case I don't trust them.

You may have detected I'm a big believer in DD's. Indeed, I've had as many as 28/month leave my account...and in nearly 3 decades I've never had a problem.

BTW I couldn't see anything about the time it takes to transfer funds on the link you sent.

You'll need to search within the BACS site for specifics.