Interest calculation on the Woolworths QF MC

[N860CR]

Forgive me if this is normal credit card procedure, but I'm not the type to ever pay a cent of interest on a credit card so I don't really understand.

My last statement for my Wollies QF MC was ~$10,000. Went to pay it about a week before due date and, damn, only $9500 in the transaction account. Send that across to the card and (as seems to be the case - anyone else noticed that bPay payments take forever on this card), three days later it appears on the Woolies account. At the same time I organise to move the remaining $500 from another account into my trans account and then move it across to the credit card. By the time I bPay it's 2 days before the due date and, of course, it doesn't appear in on the card for 3 days. Annoying, but I see it as $500 overdue for 1 day so who really cares.

I care when interest charges for $10,000 for the previous month and the next month appear on my account! Call to Woolworths and get onto a fairly helpful lady in India who explained whenever you don't make the full payment by the end of the period the entire interest free period is removed and you're charged interest on the whole amount for that period and the entire next statement period (regardless of the fact that I'd paid off 95% of it and the rest was late by a day).


In fairness, this is written in the policy (hard to find, but I did) and like I said, I've never paid a cent of credit card interest (and never will) so it's all new to me, but it seemed very unreasonable.

To their credit, after going through three supervisors they did agree to waive it (as long as I took a lecture!), but it'll certainly keep me very careful in future!

 

[cove]

Good topical issue Daniel as it will now happen a lot to our AFF members. Go to the auto pay on the EDR site as that grabs the money automatically if you miss it while you are travelling. The other thing one can do is to put the account into credit to stop the massive charges clock from continuing to tick loudly.

 

[oz_mark]

Unfortunately, Woolies, and even HSBC are not the only ones that do this. Make a payment late, and the interest is calculated on the full statement balance, often backdated to the start of the statement period.

I find it a bit of a harsh calculation, but that's what it is.

 

[N860CR]

I figured it might be normal (as they did seem a little shocked that I found it unreasonable) but I've basically banked with Westpac my whole life prior to this product and have become very used to their good service and fair policies. I've had a bit of a dig through the terms of the Woolies card v's my Earth cards and there are a lot of little points that make the Woolies product less attractive (if you were the type to miss payments etc).

It'll teach me to pay more attention! But now that I've upgraded to a Platinum Earth card, the Woolies card is going to become just the "emergency Mastercard".

 

[oz_mark]

It'll teach me to pay more attention! But now that I've upgraded to a Platinum Earth card, the Woolies card is going to become just the "emergency Mastercard".

But the Platinum Earth Mastercard only pays 0.5 QFF points per dollar. Or are you planning on just using the Amex part of it?

 

[AdMEL]

Sounds like the card issuer (HSBC) is not honouring their Bpay agreement - all BPay members (banks, billers, etc.) must credit payments on the same day, provided the payment is made before your bank's cut-off time (usually 6pm Sydney time). i.e. if you made the $500 Bpay payment before 6pm Sydney time, HSBC must credit it same day. If they tried that on me, I would be taking them to Ombudsman if necessary.

From Westpac's internet banking terms and conditions (I've highlighted the pertinent points):

30. BPAY Biller Cut-off Times

Subject to clause 38 - Cut off Times, Billers who participate in the BPAY Scheme have agreed that a BPAY Payment you make will be treated as received by the Biller to whom it is directed:

• On the date you make that BPAY Payment, if you tell us to make the BPAY Payment before our Payment Cut-Off Time on a Business Day; or
• On the next Business Day, if you tell us to make a BPAY Payment after our Payment Cut-Off Time on a Business Day, or on a non-Business Day.

31. Delay in processing

A delay may occur in processing a BPAY Payment[SUP]®[/SUP] where:

• There is a public or bank holiday on the day after you tell us to make a BPAY Payment
• You tell us to make a BPAY Payment either on a day which is not a Business Day or after the Payment Cut-off Time on a Business Day
• Another financial institution participating in the BPAY Scheme does not comply with its obligations under the BPAY Scheme
• A Biller fails to comply with its obligations under the BPAY Scheme.

It should also be noted that some banks have an unwritten 1 or 2 day grace period for payment of credit card balances in full to avoid the interest charge - clearly HSBC is not one of them!

Good topical issue Daniel as it will now happen a lot to our AFF members.

Why do you say it will now happen to a lot of AFF members?

 

[cove]

Frequent travellers can easily miss a pay in full by a due date and there are now plenty of this EDR card out there.

 

[oz_mark]

Sounds like the card issuer (HSBC) is not honouring their Bpay agreement - all BPay members (banks, billers, etc.) must credit payments on the same day, provided the payment is made before your bank's cut-off time (usually 6pm Sydney time). i.e. if you made the $500 Bpay payment before 6pm Sydney time, HSBC must credit it same day. If they tried that on me, I would be taking them to Ombudsman if necessary.

You have to deal with the financial organisation first, which was done and the charge reversed. No need to go the ombusdsman.

 

[AdMEL]

You have to deal with the financial organisation first, which was done and the charge reversed. No need to go the ombusdsman.

I did say if necessary, i.e. if they refused to reverse the interest.

In my experience (as someone who works in financial services) it never ceases to amaze me how many times I hear Bpay billers take a few days to credit payments, in breach of the Bpay agreement.

 

[N860CR]

Yep sorry wasn't very clear, I'll use Earth Amex for everything I can and then Woolies MC for everything else.Interesting to note about the bpay terms. I've noticed a lot of people complain about the slow payments on this card so it seems they aren't doing the right thing. Probably why they caved on reversing the charge without much of a fight.

 

[serfty]

...By the time I bPay it's 2 days before the due date and, of course, it doesn't appear in on the card for 3 days. Annoying, but I see it as $500 overdue for 1 day so who really cares.
...

HSBC need to treat this payment as having been made on the day of the BPay transaction. If necessary they would be refunding all interest and other charges.

It is written in the BPay T&C's.

Here's an FAQ from the BPay Site: BPAY Q and A - BPAY

How long will it take for the payment to go through?

As long as you make a payment before your financial institution's cut-off time (this is the time at the end of the business banking day when you need to make a payment by for it to be processed overnight), the biller will acknowledge the payment as having been made that day. ...

If they didn't refund, then HSBC would not be not "acknowledge[ing] the payment as having been made that day." (i.e. two days beforehand)

Woolworths Everyday Rewards Qantas credit card Conditions of Use.

Interest free days on purchases.

21.7 We do not charge interest on a purchase percentage rate item that is listed on a statement of account if:

• you pay the closing balance (excluding the amount of any purchase percentage rate item made under a special promotion, but only during the special promotion period) of that statement of account in full by the due date shown; and
• you paid the closing balance (excluding the amount of any purchase percentage rate item made under a special promotion, but only during the special promotion period) of the previous statement of account in full by the due date shown on that statement.

​

...
To their credit, after going through three supervisors they did agree to waive it (as long as I took a lecture!), but it'll certainly keep me very careful in future!

Well, as per the above, they were not doing you a service (as in "a favour") as they would have been Breaching thier BPay agreement if they had not.

 

[awilcockson]

One other thing to be careful of with this card ...

I was quite sick with the flu, didn't go near my computer for 2 weeks and missed the calendar reminder to pay off the EDR. I went to pay for some drugs at the chemist and the card was declined. Strange I thought, I know it has enough credit. Called them up and apparently as soon as you miss a payment the card is suspended "for security reasons". So not only do you get hit with a $35 fee, plus backdated interest (nearly $250 in my case ) but it then took nearly a week to get the card un-suspended. If it weren't for the 1 point per $1 earn, $89 annual fee and free supp card, I would have cancelled the card on the spot on principal. Oh, and by the way, I called them 1 day after the payment was due!

Compare this to my Citibank Platinum visa, where I similarly neglected to make a payment, and they called me 1 day after the payment was due and suggested that I make payment within 5 days to avoid an overdue fee. Now that's proper customer service.

Final kick in the teeth (for those who aren't aware) is that the 55 days interest free doesn't work any more once you miss a payment until you have made on time payments for the next to months ... which is pain in the butt because it means you have to make sure you load the card with enough cash to keep it in credit to avoid paying interest instantly on all charges.

 

[cove]

Yes get the card into credit and then keep it that way until the monthly billing rolls over.

 

[wxxnxs]

It should also be noted that some banks have an unwritten 1 or 2 day grace period for payment of credit card balances in full to avoid the interest charge - clearly HSBC is not one of them!

Agree, I have used CBA, NAB & AMEX credit cards and all of them do have grace period for payment. Normally 1 day late for the payment, they never charge me the interest nor late payment fee, AMEX is even better and it normally has 2 days.

 

[wxxnxs]

Final kick in the teeth (for those who aren't aware) is that the 55 days interest free doesn't work any more once you miss a payment until you have made on time payments for the next to months ... which is pain in the butt because it means you have to make sure you load the card with enough cash to keep it in credit to avoid paying interest instantly on all charges.

This is a norm, not only for this card but also other credit cards in the market. Basicly, if you miss one month payment, you have to wait at least 1 full month sometimes 2 consecutive months to get 55 interest free days again.

My experience is if you miss the payment, call the customer service centre and ask them how much is the total amount plus interest due in the account, this amount must include the current charge as well, and then pay for that as well as a little bit extra to cover the interest occured which has not been charged. You may entitle to have remaining period for your interest free purchase.

 

[N860CR]

I think the big point of difference between this card and the other cards from the larger banks is the associated service. Woolworths/HSBC have obviously tagged this as a "less than premium" product, which is obvious from the fairly average call centre, unforgiving conditions and terrible internet banking portal.

When banking with Westpac etc, should something go wrong (your fault or theirs) it's easy to call and speak to an efficient Australian call centre and I've found they always try to do the right thing by you. Even though I did get a good result with Woolies in this case, it took some work and the Indian call centre staff clearly lacked authority and the ability to think on their feet.

This goes on from a number of small issues I've had with this card, things like it being cut off when making online purchases and then being a huge fight to get it fixed and receiving incorrect information on specific policies from call centre staff. It also annoyed me on this call when I asked for the name and location of the people I'd spoken to (for verification later on) and I was spelt out three different Indian names only to be told "We are in Sydney in New South Wales". I couldn't care less where the call centre is (provided they do their job properly) but I do care when I'm straight out lied to.

It'll be interesting to see how this fee reversal goes, something tells me I'll need to chase a few more times.

 

[cove]

Mrscove went Platinum BankWest instead of the EDR Woolworths card because their back office works more sweetly as they are a division of Commonwealth Bank but have their own management team.

 

[justin23]

I've encountered the peculiarities of this card also. Fortunately my monthly spend is only $1500 or so. However the thing that irks me is that the due date for the billing period changes. As I get paid monthly, I want the due date for the billing to be a fixed date everymonth....
So this card may end up getting the chop. I'll get the same benefits using my AMEX and woolies card anyway.

 

[moa999]

I've encountered the peculiarities of this card also. Fortunately my monthly spend is only $1500 or so. However the thing that irks me is that the due date for the billing period changes. As I get paid monthly, I want the due date for the billing to be a fixed date everymonth....
So this card may end up getting the chop. I'll get the same benefits using my AMEX and woolies card anyway.

That's pretty common and happens across all my cards.
I am paid on the 15th and have now set them all so depending on the month it hits on the 16-20th.

Interestingly AMEX is worst on this part - they can't just change the cycle date on their computer they have to issue a new card as one of the digits on the card number corresponds to the cycle

 

[justin23]

That's pretty common and happens across all my cards.
I am paid on the 15th and have now set them all so depending on the month it hits on the 16-20th.

Interestingly AMEX is worst on this part - they can't just change the cycle date on their computer they have to issue a new card as one of the digits on the card number corresponds to the cycle

I've heard that about AMEX. Fortunately mine is middle of the month and I get paid end of the month. I'll call and see if i can get the woolies one changed at least so the earliest date is the 1st of the following month.