Sneaky HSBC charges

warnski

I've had a Mastercard with HSBC for years and have always used it to delay paying for shopping etc but paid off my balance in full each month to avoid interest charges.

However, I noticed on my most recent statement a small charge for 'interest on purchases'. I presume this is a new money-making device on HSBC's part, and although it was only a small fee I'm going to stop using my credit card immediately.

Its been a handy thing to have, though, so can anybody suggest an alternative credit card that won't charge me when I pay off the balance in full each month?

I did apply for AmEx a couple of months ago, and was rejected for low income. I've since re-assessed my income and realised I was selling myself really short in the application. But now I'm concerned that its too soon to re-apply, and don't want my credit rating damaged by repeated rejection. Also, I know AmEx is limited as to where you can use it, which makes me think I might be better applying for something else.

Any suggestions welcome! thanks

skyrider007

You should not be charged interest when you've been paying your bills off in full. I would suggest you call HSBC and question them immediately, there must have been some mistake.

Do you pay by Direct Debit or do a transfer by yourself? If the latter applies then make sure you've paid the exact balance on your previous statement. Even if you're 1p off the full balance, they'll charge you interest on the whole balance.

cifpower

If you pay the balance off in full every month why not consider a cashback card? Have a look at Martin's write-up

nzseries1

I would have thought surely there must be some reason why you've been charged "Interest on purchases", I have an HSBC mastercard as well and never have noticed any sneaky fees!

Do you have your last month's statement handy as well as your most recent one? Can you confirm that the payments on your most recent statement add up to the "closing balance" of your previous statement?

warnski

I pay off full balance every month by direct debit so that's not the issue. just checked my online statements and the charge is described as 'INTEREST ON PURCHASES AT 1.456% PER MONTH'

I will call the bank tomorrow and check if its a mistake, but I had heard that the big banks are looking for ways to recover the revenue they are losing in the courts, so I just presumed this new charge was something I would have known about if I'd read the smallprint on some mail I probably ignored!

Bare in mind its only a tiny charge (less than 2quid in my case this time), and this is the first time its ever appeared on my statement. Perhaps you guys are all in for the same next statement you receive?

I think a cashback card would be wise for me, am just trying to decide which to apply for.

Idiophreak

warnski wrote: »

Also, I know AmEx is limited as to where you can use it, which makes me think I might be better applying for something else.

Yeah, I've got a Nectar Amex and I can't use it as often as I can.

Mastercard's clearly the way forward - try and make sure you get something for your spending though, cashback, clubcard points, airmiles etc

NickX

warnski wrote: »

I've had a Mastercard with HSBC for years and have always used it to delay paying for shopping etc but paid off my balance in full each month to avoid interest charges.

However, I noticed on my most recent statement a small charge for 'interest on purchases'.

I think you have made a transaction that has been treated as a "Cash Advance". These usually incurr an immediate fee and will start to accrue interest imediately which is payble even if you settle your balance in full.

"Cash advances" can relate to gambling transactions, foreign currency purchases and even some gift vouchers.

The Card Company should be able to tell you precisely which transactions you are being charged interest on and why.

allan673

ive got a hsbc mastercard and pay it off fully every month, never been charged a thing?
i would ring them up.

nzseries1

NickX wrote: »

I think you have made a transaction that has been treated as a "Cash Advance". These usually incurr an immediate fee and will start to accrue interest imediately which is payble even if you settle your balance in full.

"Cash advances" can relate to gambling transactions, foreign currency purchases and even some gift vouchers.

The Card Company should be able to tell you precisely which transactions you are being charged interest on and why.

I don't think it can be this, because on HSBC statements (well on mine at least) "INTEREST ON CASH ADVANCES" is listed separately to "INTEREST ON PURCHASES", and the first post said quite clearly "interest on purchases"... although cash advances is really the only logical explanation isn't it.

Contact your bank... they should be able to explain all. And then let us know! :j

NickX

nzseries1 wrote: »

I don't think it can be this, because on HSBC statements (well on mine at least) "INTEREST ON CASH ADVANCES" is listed separately to "INTEREST ON PURCHASES", and the first post said quite clearly "interest on purchases"... although cash advances is really the only logical explanation isn't it.

Contact your bank... they should be able to explain all. And then let us know! :j

OK, I wouldn't have known this as I never make cash advances due to the "rip-off" nature of the charges.

The only way I can see "INTEREST ON PURCHASES" accruing is if the balance was not settled in full one month, but apparently this is not the case either.

Only answer left is to contact HSBC for a full explanation - and yes please let us know what they say ? Thanks

nzseries1

NickX wrote: »

OK, I wouldn't have known this as I never make cash advances due to the "rip-off" nature of the charges.

I was naughty one month... I went hideously over budget and then realised I had to come up with £750 deposit for a new flat!