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Halifax Clarity T&C change - interim manual payments now not accounted for?

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Satsuma
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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156924

Postby Satsuma » August 3rd, 2018, 12:02 pm

swill453 wrote:
Satsuma wrote:What the letter seems to be saying is those payments will simply be disregarded, and interest on the ATM withdrawals will continue to be accrued daily until the full balance (ATM cash + interest + airport snacks) is taken by DD at the end of the month.

I don't think it does say that, and as I said above I think it would be illegal for them to do that.

Repayments have to be applied against the highest interest balance. They can't simply ignore them until some future date.

Scott.


(honestly not trying to be dog with a bone here...! :D )

But in my example, which is not atypical for my usage, I have paid off all the highest interest, yes?
So the only payment left is my airport snacks, which are [technically] interest-free anyway. And they'd be paid off asap too (before the DD is due).

So the balance is easily likely to be £0 by the time the DD date rolls round, even if I have racked up £hundreds in spending through the month.

But their own wording says: “After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced....This change means that any additional payments to your account will no longer affect your direct debit payments, helping you pay off your balance more quickly.”

It's either a case that the wording is phenomenally bad; or there is a much bigger change afoot - the usage of "no longer" means they are changing from what it currently is - that an additional payment WILL affect the DD..

(It may be that yours/someone else's(?) comment about it only applying to people who have a rolling balance and only make partial payments, but if so, that's back to it being phenomenally bad wording!)

What's most frustrating is the inability of Clarity to explain this to me, and it's their new policy! :(

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156931

Postby GoSeigen » August 3rd, 2018, 12:23 pm

Thanks pochisoldi for the very detailed post which has cleared up the confusion for me. I see that it comes down to my different understanding of the terms to him.

Here is an extract from the terms:

We will reduce the amount you owe in the following order:

any overdue amounts from previous statements; then
the remaining balance on your statement; then
any recent transactions not yet shown on your statement.


So the order is not as pochisoldi states but IMO:
1. overdue amounts [from previous statements]
2. remaining balance not just on the last month's statement but on the entire account statement -- including any recent transactions which have been added to the statement i.e. which are no longer "pending".
3. Unstatemented (i.e. pending) transactions.

Having read the above, posters may not still agree with my interpretation but it is my understanding and why I did not follow the earlier post(s).

Now applying the above to pochisoldi's example:



pochisoldi wrote:

To illustrate this:

The month before last you cleared the bill in full, so no interest is being paid on anything on last month's statement.
Last month's balance was £200
You spend £150 on purchases
You withdraw £100 in cash

This means your account balance is £450, consisting of
£200 from last month (0%)
£100 on which interest is being paid (=cash)
£150 on purchases since last statement

Scenario 1: Just pay off the amount of the cash withdrawal
If you simply pay off £100, equal to the cash withdrawal transaction, your account balance then becomes £350 of which
£100 from last month (0%)
£100 on which interest is being paid (=cash)
£150 on purchases since last statement


I'd say:


Scenario 1: Just pay off the amount of the cash withdrawal
If you simply pay off £100, equal to the cash withdrawal transaction, your account balance then becomes £350 of which
£200 from last month (0%)
£0 on which interest is being paid (=cash)
£150 on purchases since last statement

because all statement entries which are not overdue have equal priority -- even recent spending not liable to be paid by the next payment due date.

Thus the cash balance gets paid off in priority to the retail balances because it attracts the higher interest.


pochisoldi wrote:The method I've described has worked for me for the 7 or so years I've had the Clarity card, and I've never paid more than pennies in interest.


Pochisoldi's method would work of course, but he is paying balances off earlier than he really needs to IMU.

GS

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#157249

Postby AF62 » August 5th, 2018, 9:03 am

Can I suggest there is something in the wording which I cannot see has been mentioned so far and may be the reason for the change -

“After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced....This change means that any additional payments to your account will no longer affect your direct debit payments, helping you pay off your balance more quickly.

I assume that previously if you had a fixed amount Direct Debit but made an additional payment during the month that the fixed amount DD was reduced.

Is the change simply to help people reduce their debts, so those who have a fixed DD and make additional payments don't have the DD reduced so they pay off their debts quicker and pay less interest.

For those with full balance DDs however, if Halifax did do the crazy thing which is being suggested of either -
- Before the statement is produced not setting the full balance DD to take account of any additional payments; or
- After the statement is produced not adjusting the DD amount to take account of any additional payments made after it was sent out but before the DD was taken
then they would be frequently taking far more than is required, which they won't want to do as it will generate calls and requests to get it back.

So yes, I don't think it is very well worded but I think its aim is good and not the bad suggested.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#157540

Postby Raptor » August 6th, 2018, 4:21 pm

I thought that this may be something helpful and better explained. I only have 1 cc that I pay minimum balance (this is the first statement) and that is Virgin. On their statement they say:-

Please note we will still collect your Direct Debit even if you make additional payments


So I read through the "blurb" and this is only applicable if you do not pay off the full amount. It also says that any payments received pay off in the highest order of charges first. So seems to agree with Clarity.

Raptor.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#157593

Postby FredBloggs » August 7th, 2018, 12:31 am

Am I the only one mildly amused at the lack of clarity regarding the new terms at the Clarity card?

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#157648

Postby pochisoldi » August 7th, 2018, 11:04 am

The taking of direct debits is quite clear.

Make an interim payment (or get a refund credited) to the card, and a direct debit for the amount shown on the statement will still be taken.

The only exception is if the taking the quoted amount will take the account into credit, in this case the direct debit will be reduced.

This is "good news" for people running a balance from month to month.

It makes no difference to people with a full balance direct debit who never withdraw cash.

It requires action for people who have a minimum payment direct debit as a safety net, and then make a full payment manually before the DD goes out, will have to change that manual payment to "statement balance" less "minimum payment", otherwise they will end up paying off a bit of their current month's spending early when the minimum DD goes out.

It's bad news for people who currently have a full balance direct debit, use their card for cash withdrawals abroad, and make an interim payment to avoid interest on the cash withdrawal, as it will mean that any purchases you make "this month" will get paid off early by the direct debit to cover "last month".

The simple solutions are one of the following:
  • Cancel the direct debit altogether and do a future dated bill payment for the statement balance
  • Switch to minimum balance direct debit, do a future dated bill payment for the statement balance less the minimum payment
    If you have a regular payment going out of the account which is > £5:
  • Switch to fixed amount direct debit, and when there's some extra spend, do a future dated bill payment for the statement balance less the fixed amount

Personally, I've gone for the "Switch to fixed amount direct debit".

PochiSoldi

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#157730

Postby Satsuma » August 7th, 2018, 3:58 pm

pochisoldi wrote:It's bad news for people who currently have a full balance direct debit, use their card for cash withdrawals abroad, and make an interim payment to avoid interest on the cash withdrawal, as it will mean that any purchases you make "this month" will get paid off early by the direct debit to cover "last month".


^^ This is me.

But I don't think your assertion is right. Clarity clearly state that payments will be applied to transactions with the highest interest first.
So given purchases are interest free (if cleared in same statement month) and cash withdrawals are 18% (or something like that), if I make an interim payment, that will be allocated against the cash withdrawal first.

pochisoldi wrote:The simple solutions are one of the following:
  • Cancel the direct debit altogether and do a future dated bill payment for the statement balance
  • Switch to minimum balance direct debit, do a future dated bill payment for the statement balance less the minimum payment
    If you have a regular payment going out of the account which is > £5:
  • Switch to fixed amount direct debit, and when there's some extra spend, do a future dated bill payment for the statement balance less the fixed amount

Personally, I've gone for the "Switch to fixed amount direct debit".

PochiSoldi


Cancelling a DD and having to make manual payments sound likes the worst option! I like having automated payments to clear all my bills/cards each month, with no faff of having to top up or calculate what may or may not be due this month or that month.

I am still none the wiser from the horse's mouth though, so I will make a diary note to ensure my balance is £0 by the date of changes, and then do a full statement month of low£ test usage and interim payments just to see what happens in reality. Hopefully it is just bad wording! I will keep this thread updated on my findings...

Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#159566

Postby melonfool » August 14th, 2018, 3:39 pm

Are you sure there isn't an associated clause somewhere that says that they will not allow the card to go into credit? Most CC have this rule and, if they do, it negates the issue you foresee and supports the current status quo.

So, if you make a manual payment, then the DD is set to clear the *remaining* balance, they cannot adjust your DD to pay them an imaginary balance that puts you into credit.

I can see why they have done it as some people have debts they don't realise they will never pay off, they pay towards it, DD goes down, they haven't actually paid any more than they would have done. In fact, I think banks have been asked to do this.

Anyway, get a Monzo account!

Mel

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#159689

Postby chas49 » August 14th, 2018, 9:47 pm

melonfool wrote:Are you sure there isn't an associated clause somewhere that says that they will not allow the card to go into credit? Most CC have this rule and, if they do, it negates the issue you foresee and supports the current status quo.

So, if you make a manual payment, then the DD is set to clear the *remaining* balance, they cannot adjust your DD to pay them an imaginary balance that puts you into credit.

I can see why they have done it as some people have debts they don't realise they will never pay off, they pay towards it, DD goes down, they haven't actually paid any more than they would have done. In fact, I think banks have been asked to do this.

Anyway, get a Monzo account!

Mel


There is:

You must not pay us more than you owe when you make payments to your account, or transfer funds from another credit or store card if this creates a credit balance on your account. If there is a credit balance on your account at any time, we may apply it to any recent transactions not yet shown on your account, or to transactions made after the date your account goes into credit. We may also return any credit balance to the account from which the money has been sent or pay the funds into a deposit account you hold with us. We do not pay interest on any credit balances or take them into account for the purpose of any reward schemes.


https://www.halifax.co.uk/creditcards/h ... rity-card/

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#159691

Postby melonfool » August 14th, 2018, 9:51 pm

There you go, all sorted then!

Mel

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#159701

Postby paulnumbers » August 14th, 2018, 10:37 pm

Satsuma wrote:So how do I achieve my goal of minimising interest payable on the ATM withdrawals - or is maximising it their goal?!


Simple, grab a starling card (bank account with debit card) instead and pre-load it with the cash you need, or load it via faster payments during your travel.

https://www.starlingbank.com/

It is also mastercard and has no fee's other than the mastercard spread, just like Halifax Clarity. The trendy youngsters seem to love it.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#160075

Postby Satsuma » August 16th, 2018, 10:31 am

Thanks for the suggestion, but I don't want a prepaid card. My spending on it is very variable which is part of the convenience of having credit.

Once upon a time I worked in financial services marketing. I remember the struggles I had with my compliance team who insisted on everything being absolutely categorical and unambiguous (and all I was trying to do was get leads for a sales team, not changing T&Cs!).

So the fact this has generated several differing POVs is concerning in itself.

As it is, it doesn't look like Clarity are going to contact me again (despite a clear promise to do so), and I am not sure I have the energy to try again. Not to mention that the changes are a done deal now anyway (whatever they are!). So I guess I'll just have to wait for my next overseas trip after Sep 21st - where i will continue with my manual payments throughout the month - and see what happens!

Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164657

Postby Satsuma » September 6th, 2018, 1:45 pm

UPDATE:

Satsuma wrote:As it is, it doesn't look like Clarity are going to contact me again (despite a clear promise to do so), and I am not sure I have the energy to try again.


I was wrong about this part. Just got off a marathon call with Halifax. I'd long since given up.

Satsuma wrote:Not to mention that the changes are a done deal now anyway (whatever they are!). So I guess I'll just have to wait for my next overseas trip after Sep 21st - where i will continue with my manual payments throughout the month - and see what happens!


I was right about this part though, along with my initial assertion, unfortunately.

It's not a finished conversation, as the manager is calling me back after she's checked some other bits, but the long and short of it is that (after the changeover date), if you have a full balance DD set up, Halifax WILL take the entire balance as listed on the statement. Any manual payments you make throughout the month will not be "known about" by the DD system (although I think may still be applied to the balance) and you will end up with a credit balance on your next statement.

The options seem to be:
* Change the DD to fixed amount/min payment only. You will need to ensure you manually clear whatever balance remains to avoid incurring unnecessary interest.
* Cancel the DD completely. You will need to ensure you clear whatever balance remains to avoid incurring unnecessary interest. You will also need to ensure you don't miss a payment as that will affect your credit rating.
* Retain a full balance DD and forget all manual payments and suck up the extra accrued interest for ATM withdrawals.
* Retain a full balance DD and make manual payments to minimise interest on ATM withdrawals; then phone up for a refund each time after the DD puts you in credit.

The manager was sympathetic to my concerns and agreed that she worked much the same way, and that feedback such as mine could help shape changes in policy. I am yet to be convinced, but I am quite interested to see what happens in the next couple of months when a whole bunch of people make manual payments as normal, and then find they have been charged the full balance by DD as well.

Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164673

Postby Satsuma » September 6th, 2018, 2:08 pm

I've just read the thread again and based on my earlier example, I think this is what they are saying will happen:

Satsuma wrote:So I start with £0 balance on the day I leave the UK for a sunny week abroad (assume this is all within one statement month)...

- I withdraw cash from an ATM when I arrive abroad. It takes 1-2 days to appear on my account, but as soon as it does, I transfer that amount over to clear it. A few pennies of interest may accrue here.
- Repeat above throughout trip (let's assume I don't make any card purchases for ease)
- I return home and the only transactions left to clear is a last minute card purchase of some airport snacks before I flew back.


For the sake of argument, say the multiple ATM cash withdrawals came to £250 and the airport snacks were another £50. So I spent a total of £300.

Currently the full balance DD will only take £50, as the £250 has already been paid off.

In future I think this means:
* The ad-hoc payments of £250 will still be posted to the account as and when they are received (minimising interest).
* The £50 airport snacks were still unpaid
* But the full balance DD will still take £300, leaving me with a £250 credit balance which I need to get manually refunded.


Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164685

Postby Raptor » September 6th, 2018, 3:03 pm

Do not forget that the DD amount is determined by the statement date. So you withdraw from atm, it appears on your account on the 23th, so you make a payment. The statement date is 28th (your payment has been taken into account). The DD will be based on the amount outstanding on the 28th.

Raptor.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164707

Postby swill453 » September 6th, 2018, 4:58 pm

Satsuma wrote:It's not a finished conversation, as the manager is calling me back after she's checked some other bits, but the long and short of it is that (after the changeover date), if you have a full balance DD set up, Halifax WILL take the entire balance as listed on the statement. Any manual payments you make throughout the month will not be "known about" by the DD system (although I think may still be applied to the balance) and you will end up with a credit balance on your next statement.

Obviously I fully accept this is what you've been told, but I'd wager a small bet that this isn't what happens :-)

Scott.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164822

Postby GoSeigen » September 7th, 2018, 8:57 am

swill453 wrote:
Satsuma wrote:It's not a finished conversation, as the manager is calling me back after she's checked some other bits, but the long and short of it is that (after the changeover date), if you have a full balance DD set up, Halifax WILL take the entire balance as listed on the statement. Any manual payments you make throughout the month will not be "known about" by the DD system (although I think may still be applied to the balance) and you will end up with a credit balance on your next statement.

Obviously I fully accept this is what you've been told, but I'd wager a small bet that this isn't what happens :-)

Scott.


What's your reasoning Scott? That's exactly what I expect to happen too, based on my discussions with Halifax staff.

GS

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164824

Postby swill453 » September 7th, 2018, 9:12 am

GoSeigen wrote:
swill453 wrote:Obviously I fully accept this is what you've been told, but I'd wager a small bet that this isn't what happens :-)

What's your reasoning Scott? That's exactly what I expect to happen too, based on my discussions with Halifax staff.

My reasoning:

1. Credit card accounts don't "like" being in credit.
2. Every credit card account I've ever had avoids this by adjusting "full payment" Direct Debits downwards to take account of credits made in the meantime.
3. Halifax Clarity has/had the ability to do this.
4. I don't see how it's in their interest to remove this ability/facility.

Scott.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164842

Postby GoSeigen » September 7th, 2018, 10:08 am

swill453 wrote:
GoSeigen wrote:
swill453 wrote:Obviously I fully accept this is what you've been told, but I'd wager a small bet that this isn't what happens :-)

What's your reasoning Scott? That's exactly what I expect to happen too, based on my discussions with Halifax staff.

My reasoning:

1. Credit card accounts don't "like" being in credit.
2. Every credit card account I've ever had avoids this by adjusting "full payment" Direct Debits downwards to take account of credits made in the meantime.
3. Halifax Clarity has/had the ability to do this.
4. I don't see how it's in their interest to remove this ability/facility.

Scott.


All solid reasons, but banks sometimes do pretty stupid things, and software developers especially do. I remember when Abbey/Santander repeatedly annoyed its customers with seemingly pointless changes, culminating for me with the time I went into a branch to open a savings account for some £40,000 of my savings and they said they couldn't without making an appointment with a manager the next week.

Like you I hope Halifax haven't screwed up in this case, but I suspect they have -- or perhaps it is a deliberate strategy to discourage more savvy full-balance customers who probably generate very little profit for the bank.


GS

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#164846

Postby Satsuma » September 7th, 2018, 10:41 am

Rightio, I think I have finally got to the bottom of it all....!
(@Raptor also managed to very casually slide in an extremely lightbulb fact about statement dates at 15:03 that really helped, so big thanks to him/her!)

The CURRENT situation is as follows:
(I have used my actual statement dates and usage for ease, but of course vary to your own circs)
- My statement is generated on the 8th of the month. At midnight on the 7th, a 'snapshot' is taken and sent off to the DD department.
- The DD is actually paid on the 1st of the following month.
- I can continue to make manual payments right up to a few days before the DD is run (the cut-off date is listed on each statement), and these will reduce the DD taken.
- These manual payments will be applied to overseas ATM withdrawals first and therefore minimise the interest charged.
- The DD will collect the residual balance left, as at the cut-off date.


The NEW situation (after this month) will be as follows:
- My statement is generated on the 8th of the month. At midnight on the 7th, a 'snapshot' is taken and sent off to the DD department.
- The DD is actually paid on the 1st of the following month.
- Regardless of any extra manual payments made after the snapshot is taken, the DD amount will NOT change and the full snapshot figure will be taken.
- Extra manual payments will be set against activity from 9th onwards, or refunded if I request etc.
- This means any manual payments for ATM withdrawals that are not cleared onto my account by midnight on 7th will not count and I think means that daily interest will continue to be accrued until a manual payment is received and cleared.

e.g. Say I withdrew $500 on 6th of the month. It appears on my account on 7th and I make transfer the exact equivalent in £ to cover it on the 8th. However the snapshot was taken at midnight on 7th. Previously the DD would have adjusted to reflect this. The NEW change means the DD will NOT be adjusted, even though the £ transfer has paid off the $500 a day later.


@Scott and @GoSeigen - I think the last point above about interest accrual may be some explanation as to the reason behind the change - too many Fools not making them enough money? The lady I spoke to also said there had been "confusion" with people not understand that payments made on the day of the DD would not reduce the DD etc. TBH she was all but agreeing with me entirely, but I understand her job means she can't just say that plainly. She did also say that customer feedback like mine is weighted and taken seriously into account when deciding changes like this

As previously, my options are to change or cancel the DD amount (all of which means I have to start remembering to make some level of manual payment to clear the balance each month).

Or get a Santander Zero card which still seems to operate the "old" way (snip from the T&CS: "...it's important to remember that interest is charged on cash withdrawals and is charged immediately so there's no interest free period. To keep these interest charges to a minimum, you would need to clear your full balance as well as any recent transactions as soon as possible after the cash withdrawal..."

But as it is, I foresee a situation in the coming months where people like me are happily making their manual payments that clear on or just after the snapshot date and expecting the DD to adjust, but it doesn't. For work expenses especially this could be a problem, where employers don't reimburse interest charged.

Sats


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