Credit card hold


(Michael Jenkins) #1

While on Holiday I needed a credit card for twice and could not use my Monzo card :frowning: Both relating to putting a hold on a card, but two slightly different scenarios:

  • Deposit for a rental car (£600) - plan to be refunded in full
  • Deposit for hotel for meals and drinks during the stay - Plan to spend an amount close to the hold

I have read in the forum have used their Monzo cards, and an amount is charged and later refunded. Is there any reason one should not do this?

Is there way Monzo can facilitate or mimic a credit hold i.e. showing the hold but not reducing your balance / providing a temporary (free?) overdraft for the hold value and put it in a separate pot?


(keith jones) #2

So you want monzo to trust you not to spend money that was preauthed? On a prepayment card?


(Michael Jenkins) #3

haha…yes. Obviously not on a pre-paid card. With a current account and full knowledge of my income and credit rating.

If I crash the rental car and I lose my deposit, i’m pretty sure Monzo know my account details.


(keith jones) #4

So you want your debit card to act like a credit card?


(Michael Jenkins) #5

I want my monzo card to be able to provide a feature that I believe is currently only possible with a credit card.

See this thread:


(Marta) #6

Well, Monzo is a prepaid card now, so certain ‘hold’ transactions are not doable due to card type.

Once current accounts are in play, as well as debit card type, it can be used to temporarily hold funds and then refund them. Therefore, you don’t need a credit card.

People had refunds in ‘general’, genuine refunds, or when Amazon does funny backwards and forwards with one transaction. It most likely didn’t have anything to do with ‘pre-authorisation’ of funds for future bill like scenarios you’ve mentioned. It’s not doable on pre-paid card.

Now, regarding temporary overdraft - it’s planned, not sure about ‘free’ because details were not released yet. I’m not sure if overdraft can be used for pre-authorised locked amounts on your card, I would guess (!) that it can be used. Note that Monzo will ask for overdraft permission first.

In a way, Monzo debit card with overdraft (if it allows pre-auth payments) will be equal to credit card that allows you to go into minus balance. What’s unknown is your expectations regarding lending?


(Michael Jenkins) #7

No expectations - I came across a scenario where I couldn’t use my Monzo card, or a debit card.

I have a good credit rating and a hot coral piece of plastic. My question is why do i need a credit card in this case.


(Leon) #8

Well if Monzo is not offering a credit card, then I guess a debit/credit
hybrid, as unholy as it sounds, is possibly the best way forward.


#9

debit/credit hybrid cards are possible. they are available in germany and finland for example. when using your card in an ATM or POS it gives you a menu option of DEBIT or CREDIT. The customers agree to both debit card and credit card terms. However if Monzo do not wish to offer Credit cards then they are highly unlikely to opt for a hybrid card as it effectively incorporates a credit card which they do not wish to do


(Leon) #10

Well that’s true but for how long can Monzo go against what most people
want?

For me it’s a current account, savings account plus a credit card.

Getting things from the marketplace will not really be ideal, because most
people want things off one supplier.

Even worse it makes something harder that should be easy. If I wanted to
search the marketplace for a credit card then just do a Google search and I
would get a better APR via the above anyway.

For me it’s the worse of both worlds and the best of none.


(Naji Esiri) #11

@leon right now our focus is on making the best current account we can possibly offer, instead of spreading efforts thinly across a variety of banking products. Once we reach that point, the sky’s the limit :rocket: and whilst I’m pretty sure we won’t be offering a credit card at any point in future, we will most likely revisit things like savings accounts too.

Making banking as convenient and easy to manage as everything else on your phone is paramount. The reason we haven’t started pushing lending products and different banking products yet is not because we feel they aren’t important, it’s because we want to provide them in a way which aligns with this approach and makes your money easier to manage regardless of account type.


(Alex Sherwood) #12

Tom has said that he wants to address the common reasons why people use credit cards, despite the fact that Monzo won’t be offering them themselves.

Perhaps you do but it’s worth remembering that, that doesn’t mean that most people do.

If Monzo can make managing services from several providers straightforward (which is one of their main goals), then I’d rather have a choice. Isn’t one of the main issues with the legacy banks that they don’t offer their best products to existing customers? Instead they’ve relied on customer’s inertia (due to a lack of meaningfully different alternative banks), to sell them products that are not as good / worse value than what’s available elsewhere.

I’d prefer it if I had several suppliers competing to sell me their products, while I have easy access to all of them because that competition will result in better value for me.

Rhetorical question - do you search Google when you’re looking for a new app on your phone? It should be just as easy to find a product through Monzo’s marketplace as it is when you search the app store. And the whole point is that you will find the best APR or whichever other features you’re looking for, this way.

Obviously that’s not going to be straightforward for Monzo to deliver but for now, I’m keeping an open mind.


(Bruce) #13

I’ve argued with car rental before and was allowed to use a debit card. Google search shows me others have as well. But I can imagine, especially in certain situations you’ll need a Cc


#14

I had a car rental in Colchester refuse point blank to accept a debit card and said if I don’t have a credit card I would need to give them hundreds in cash to lock in their safe as a deposit


(Leon) #15

I would argue the point that I have made about most people wanting bundled services with the fact that most people still keep the same bank account that they have had as a teenager/student. Why? It’s easier.

You would prefer to have several products via Mondo’s marketplace that’s fine but I would prefer over 700 via a Google search to which I can bet I will probably find a better deal.

Tom has asked us why we want credit cards and that’s fair enough. Unless he is going to create a debit/credit hybrid card whatever he cooks up will not have all the functionality of a credit card anyway.

For example up to 56 days interest free credit on all purchases? Err no as Monzo will make money by charging us interest (on borrowing) while giving us none on credit balances. (That’s an issue for another day.)

Don’t forget banks use our money to make money on the money markets during the nights.

That’s only one there are lots more functions of a credit card that either can’t or won’t be replicated.


(Alex Sherwood) #16

As I said, lets wait & see what Monzo come up with :slight_smile: the whole point of innovation is you’re doing something that’s not been done before :rocket: