What about credit cards?


(Dave) #290

As chargeback is a voluntary scheme, I doubt there is any legal route to force the defaulters bank to pay anything at all. Section 75 is clearly more useful, and chargeback might come to your rescue for items under £100.


( related to Monzo CEO, Investor in Monzo ) #291

maybe so - i remember ordering 3 or 4 thousand pounds worth of windows from a firm once with my debit card that went bust ( Dale joinery back in the early 2000s ) and getting my money back fairly quickly (couple of weeks) - maybe I was lucky :slight_smile:


(Dave) #292

Well, I suppose it depends on how the situation is judged. Clearly if as a bank you are going to promote debit cards as having chargeback, you’ve got to be willing to take a hit now and again to protect the notion that the debit cards you issue are “safe”. If not, you may as well not bother.

But maybe the money was there to be had in your case. Do people who have paid large amounts get priority over people who have only paid small amounts maybe?


(Tom Shorey) #293

It’s my one big advice to any 18-21 year old. Get a credit card, put small amount on it each month, and pay off in full each month. You’ll build a good credit score quickly which will help a lot in the future.

It would be great if Monzo disrupted the credit card market too, if they could integrate it into their app it would make it much easier to track and manage. Or if they could partner with another company like the rumours about interest on savings.


#294

The problem I found is you need good self control to keep that spending small. I kinda wish I never got a credit card, but without it my credit ‘score’ wouldn’t be as decent as it currently is.

I don’t think credit card companies should be allowed to automatically up your limit.


#295

This has always bugged me

As an 18 year old I started off with a manageable £500 limit

This eventually increased to £3000 with 59.9% APR (Vanquis bank - the devil)

Of course you can decline but as a student I just saw it as free money. My finances are still recovering now!

Edit: and only recently my Barclaycard increased to £10,000. 10k! I can’t service that debt! Madness.


(Tom Shorey) #296

Yeah it does take a lot of self control. I normally limited myself to one transaction of around £100 a month.

Fortunately it meant I could then get £3k+ limit on a 24 month 0% card to furnish a flat. As opposed to my girlfriend who had little to no credit history and struggled to even get £400.


(Adam Kendrew) #297

Yeah I agree. The limits increase should be opt in, rather than opt out.


(#savetheseabass) #298

Think they are now. From this month it’s either new legislation or a code of conduct in place. Know capital one have changed a lot of settings around this


#299

I feel Barclaycard are the worst. My limit kept going up and up and up. Last time it was up to £8k then I lowered it to £5k. I don’t want or need that much.


(MikeF) #300

I’m one of those people that Credit Card limits don’t affect so I just ignore them. An unspent credit card limit has never offered me any temptation because the only limit I’ve always used is my current account balance.

I don’t know (or remember) where I picked this habit up from, parents probably, or maybe it’s just the way my brain works. :man_shrugging:


(Katrina) #301

Bear in mind that to get the best credit score, you shouldn’t use more than 1/3 of your credit limit.


(Jamie 🏳️‍🌈) #302

Bear in mind your credit score means absolutely nothing.


(Luke Bebbington) #303

We might finally see an end to arcane credit card rewards


(Jolin) #304

This is a US-specific article. Interchange fees in the EU are already capped (for consumer cards), and the article is discussing a legal action in US courts, so I’m not sure how much impact any outcome will have over here.


(Luke Bebbington) #305

Credit card reward programmes just seem odd and outdated. Why should I get cash back when using a credit card (rather than a debit card) and then get 30 days + to pay it back.

Don’t get me wrong, I profit from using credit cards and claiming rewards, it just doesn’t make sense to me and it must be costing someone. The legal action in the US just highlights this.

In the meantime I’ll keep having my free lunch.


(Jamie 🏳️‍🌈) #306

Of course it is. It’s costing you, in the price you pay at the till.


(Luke Bebbington) #307

The price is the same if I pay cash or credit? So not costing me anything.


#308

I think he means shops could charge less if they weren’t paying credit card commissions, but that’s pretty unlikely. Ultimately rewards come from those commissions, and also the profits from those who pay interest.


(Dave) #309

Yes, and that is why I’ve always been conflicted by the Amex business model more than other banks. If you go back not too long ago, Amex didn’t have cards that charged interest as they were all charge cards. That’s changed now, but their credit cards aren’t competitive for borrowing really.

So their business model was/is to make money on higher merchant fees and card membership fees, if you are willing to pay for a card from them (yes, some are free), and they actively discourage being in debt. Great, a payment card company that doesn’t want to encourage debt… oh wait, we’re all paying Amex money whether we use their cards or not or even using cash because shops have to incorporate their fees in to their pricing model.

As others are saying, there are costs for all payment methods, including cash, that have to be passed on to the consumer, and in some cases (many even?) debit cards are more cost effective than cash. However, the Amex model (as much as I like their product) has always been one that I’m never quite sure is as innocent and beneficial as it seems.