Pre-ordering authorising the full amount months in advance

This is all working around the problem though. The problem is Monzo handles pre-auths as if it’s taken out of my account unless I moan about it in chat and get it “refunded” (released). This makes knowing how much you’re actually overdrawn by difficult. The point is, I will be paying for this product in a few months anyway, I don’t want to pay for it now. If I had Transferwise I’d have to keep money in there to pay for the thing when it eventually comes out anyway, same as on Monzo. At that point I might as well have it in a pot or just assume it’s taken out with Monzo as it already is. I can’t have a balance of zero in TransferWise and buy something to put money in it in December when the transaction finalises.

1 Like

You’d get exactly the same with any bank. The preauth is not available to spend. With the added bonus that with most banks they wouldn’t let you cancel it.

5 Likes

I’m struggling here too. With my Halifax account a pre-authorisation isn’t available to spend either. What’s the difference here?

5 Likes

Yes, the High Street way is to take the pre–auth off your Available Balance. This figure, and your ‘Account Balance’ would then just move up and down ‘in sync’ with one another until either the pre–auth is claimed, or cancelled. Arguably as confusing, because it is never detailed what the discrepancy is, you just have to remember. And of course, as other pending transactions come and go on the same card, the difference between the two balances will expand and contract.

The problem is with the company you’re choosing to do business with using systems wrongly, or to their advantage.

Your solution is, I’m afraid, to ‘work around the problem’ and use a dedicated card, unless you want to needlessly interact with Monzo customer services every time.

4 Likes

There isn’t one that I can see. Monzo does what every other bank does. It just does it more visibly.

4 Likes

I’ve explained a few times in this thread, but here’s a brief overview of my issue.

  • As @j06 mentioned, high street banks will give you two different balances. One includes pending transactions, one doesn’t.
  • Monzo give you one balance that includes all pending transactions.
  • According to my Monzo app, I am overdrawn.
  • In Monzo’s own terms and conditions, whether you are charged for your overdraft depends on the “finalised available balance (excluding pots)”.
  • The “finalised available balance (excluding pots)” is not visible in the app.
  • I have pre-authorised payments that add up to more than the overdraft amount.
  • I am not actually overdrawn and will not get charged.
  • To work around this, I ask customer support to revert the transaction so that, when it actually comes out of my balance, it’s show as a “delayed transaction”. With high street banks I don’t need to do this.

The issue isn’t whether I can spend the money or not, it’s visibility of what my real balance is. That’s what Monzo does differently. That’s the issue I’m having.

I’ve been in email conversations with Monzo about this following the release of their updated overdraft terms and conditions and fact that the balance used to calculate when to charge an overdraft is explicitly mentioned (as quoted above) but isn’t visible anywhere can potentially be a big problem.

Monzo have acknowledged this as a problem and are going to try and surface this in a way that makes sense and isn’t confusing (again, as @j06 rightly points out, high street banks don’t explain the difference between the two balances and what is causing one to be different to the other very well, which I’m sure Monzo will do much better than anyone else).

Yes I appreciate that in this particular case CDJapan may not be using the card system in the best way, but it’s only really a problem with Monzo, not other banks. However, the problem isn’t limited to pre-orders on CDJapan. You have things like car rental or hotel pre-authorisations that get refunded after so long (7 days? 30 days? who knows). Self service in the app can sometimes revert these, but it doesn’t work for every transaction. If a pre-auth doesn’t auto remove, or gets processed twice, then you’re stuck until they auto expire after 30 days.

Fact is, the way Monzo surface information is fudging the information based on a certain ideology where everything authorised will get taken within a day or two, and it’s just not the case.

2 Likes

Ah right. I get you now.

Given I don’t have an overdraft with Halifax, if I did, would they do anything different? If my available balance hit -£1 but my balance was £10 still (with a £11 pre-authorisation) I wouldn’t be charged for the overdraft?

2 Likes

They’re not supposed to (my wife’s coop did on more than one occasion though).

What they will charge you for is refused payments, letters etc.which will make your problems even worse…

Good to know! I would have assumed they would do.

Yes, you’re legally not allowed to charge someone interest or other overdraft fees for pending transactions. This is why the credit card approach is what people recommend most as it won’t count towards your statement if/until it finalises.

2 Likes

That’s all true. But being as neither the High Street banks nor Monzo have come up with a failsafe method of dealing with this, I still don’t quite see your opposition to the workaround using TransferWise. You’re going to need to actually pay for the items at some point so why not just put the equivalent amount of ¥JPY in there at the time of order and forget about it?

If the confusion is because you’re essentially purchasing things whilst in an overdraft, and it’s making it difficult to work out how much you’ll be charged, firstly, even if you just assume the worst you know Monzo’s overdraft charges will always be LESS due to the time difference in finalising transactions (ie. you won’t end up paying for a couple of days worth of charges each time)

And secondly, (the following is an ideological viewpoint on using overdrafts, not aimed at the OP, and viewed by choice…)

if non–essential things are bought within an overdraft, the bank is, in effect, paying for the items, not the purchaser, and I’m not sure the purchaser then gets to complain how the bank interacts the transaction with their own systems. If the ultimate aim is to pay fewer charges, then don’t pay for stuff using the bank’s money.

I apologise I’ve explained my point extremely clunkily.

1 Like

I suspect the issue is that it’s not the bank’s money. A pre-authorisation is still his money until the merchant takes it. Monzo (and other banks) are taking his ability to spend it but it’s his money still.

3 Likes

The confusion is that I wouldn’t actually be overdrawn, but Monzo says that I am. It isn’t using mine nor bank’s funds to pay for it at this stage as it’s just pre-authorised. Yes I need to pay for it at some point, but moving money to transferwise or equivalent means paying for it immediately and then Monzo’s fake balance becomes my real balance instead.

EDIT: Incidentally, CDJapan offer a paypal option, which would take it out of my Monzo balance immediately. But, with the more expensive purchases I make sometimes, having the few months to put money aside when the pre-order window opens rather than paying for the whole thing immediately is why this is more of a big deal.

3 Likes

Then you’re back to using a credit card. Set up a direct debit to pay the full statement balance from your Monzo account, and don’t use the card for anything else, and you’ll get an extra 56 days to budget interest free.

3 Likes

Sorry if I’m being thick then. So this is just about seeing a balance number? Not about the ability to spend anything extra or have access to the funds in any way shape or form? (Genuine question)

Am I getting closer to understanding?

If so I guess my confusion then is that since you wouldn’t be allowed to spend the money, what good would having it back on your balance display be?

I’m obviously slow today. :frowning:

2 Likes

The issue to me is mostly for those with an overdraft because it blurs the line for when you pay fees and when you don’t. Without surfacing the balance without pending transactions (and, more importantly, which transactions are actually contributing to that) the balance on the main screen, as far as I’m concerned, is wrong.

However, that’s not to say it won’t apply to those without an overdraft. Depending on what the transaction is, they may be stuck with the authorisation for a while and the money they could do with. I am quite fortunate in that my credit score is good enough to allow both an overdraft and a credit card, but that might not be the case for everyone @j06 and I’d rather not get another credit card and affect my credit score.

My workaround until I found out I can just ask in-app support to fix it is to keep a spreadsheet with all planned spending in (especially since Summary in the app is fairly useless) and this can also include one-offs and infrequent recurring costs as well. For pre-auths I have it as a negative value in my spreadsheet and rely on the balance in my spreadsheet rather than the one in the app to know how much money I actually have.

OK, I’m with you now. Thanks. :+1:

(That took me a while!)

1 Like

That’s appalling! What on earth is their reasoning? Did you escalate the complaint?

1 Like

I’m not sure I fully agree. It’s more in a sort of purgatory. I’d say it’s not theirs but it’s also not yours (you can do most of the things you’d do with money that is your with it).

It seems to me more akin to saying “i’m paying this to you now but you agree to give me x% of it back under circumstances”.

1 Like

I’ve just had a read through this thread and it does seem a little like we’re going around in circles now.

There was a point raised a while back about car hire pre-auths. I’ve had a few occasions in the past where very large amounts are held by car hire firms for a full 30 days before being returned to my credit card. I always buy excess insurance privately so I always get slapped with the largest pre-auths when hiring.

Thankfully I’m in a position where I don’t use the card much so I don’t have to worry about how much credit I actually have available. Even if debit cards were accepted I wouldn’t use Monzo for these pre-auths, I imagine they would obliterate my balance until resolved in chat.