Banks deciding they don't want people to use Credit Cards as much anymore? (Letter from Bank)

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Forums › Finance and wealth management › Banks deciding they don't want people to use Credit Cards as much anymore? (Letter from Bank)

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Hmm, what to write...
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#2814481 17-Nov-2021 12:05

Another example is paying for parking using an app. I top it up (for which I pay a surcharge) then it gets used as I park during the month.

Worse than that, the surcharge is not "quasi-Cash" it is clearly a payment for a service at the time. So no interest should be charged on that.... fat chance

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richms

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#2814490 17-Nov-2021 12:17

Do they allow you to specifically pay the cash advance off or do they do the gem visa scam of splitting any payment across all outstanding amounts, so the only way to stop paying interest is to get it to a zero balance?

Richard rich.ms

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#2814494 17-Nov-2021 12:24

richms:

Do they allow you to specifically pay the cash advance off or do they do the gem visa scam of splitting any payment across all outstanding amounts, so the only way to stop paying interest is to get it to a zero balance?

As someone said earlier, if/when you credit money to your CC account, it gets applied to paying oldest transactions first. A credit may or may not pay off a cash advance depending on when the advance occurred and how much you’re crediting.

https://www.geekzone.co.nz/forums.asp?forumid=191&topicid=290518&page_no=2#2814163

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OldGeek

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#2814496 17-Nov-2021 12:27

To me it seems the solution is fairly simple - top-up amounts can never be withdrawn. Using MyLotto as an example, the account balance could have 2 components: unspent deposits (top-ups) and winnings. When a purchase is made it is funded first from unspent deposits, then winnings. If there is a win, it is added to winnings. Only winnings can be withdrawn.

This means that unspent deposits from any source cannot be withdrawn - funds from enspent deposits must be used for a purchase. If the user closes their account they need to bring their unspent deposits to zero or loose it.

This would clearly mean that where a credit card is used to top up an account this is a bonafide purchase.

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SirHumphreyAppleby

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#2814503 17-Nov-2021 12:43

OldGeek:

To me it seems the solution is fairly simple - top-up amounts can never be withdrawn. Using MyLotto as an example, the account balance could have 2 components: unspent deposits (top-ups) and winnings. When a purchase is made it is funded first from unspent deposits, then winnings. If there is a win, it is added to winnings. Only winnings can be withdrawn.

That is not an acceptable solution as it encourages gambling. Someone who puts money into gambling should always be able to take it out if they come to their senses, regardless of their financial state or any other factors.

The solution is to target people who are involved in these sorts of transactions and guide them in the right direction. They need to have their credit cards cancelled and be given manageable loans to repay their existing debts. We get calls from the bank all the time asking us to verify transactions, and they clearly monitor this already (or at least claim to), so there is no reason they couldn't put a process in place to target those they perceive to be creating the problem.

This is money grabbing and nothing more. It will also IMO push more transactions underground. Everyday banking is simply becoming too hard.

OldGeek

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#2814507 17-Nov-2021 12:53

I was not talking about gambling - I was talking about credit-card cash withdrawals through an intermediary.

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SirHumphreyAppleby

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#2814509 17-Nov-2021 12:56

OldGeek:

I was not talking about gambling - I was talking about credit-card cash withdrawals through an intermediary.

Using MyLotto as an example

Using a gambling service as an example.

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OldGeek

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#2814518 17-Nov-2021 13:07

OK - so use a Sharsies account instead.

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boosacnoodle

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#2814547 17-Nov-2021 13:56

Nate001:

I tend to agree with the bank. Example, you could top up your TAB/My Lotto account using CC, withdraw it back to your account and get a cash advance. Same for the other quasi cash examples they list.

Will be interesting how places such as MyLotto will respond, depositing by bank transfer is too slow for most people.

This does work - for now - but the Lotto people get pretty annoyed by it and pick it up quickly.

boosacnoodle

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#2814548 17-Nov-2021 14:00

insane:

I can understand banks doing this specifically to meet anti-money laundering or problem gambling legislation. Anything above that should be done on a per customer basis. They already have sophisticated fraud prevention systems in place, so this feels like a conveniently lazy solution that penalises even those that are not abusing the system.

This doesn't stop financial crime or problem gambling in the slightest. You'll still be able to do these - legally or otherwise - but will be charged interest for the "privilege".

driller2000

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#2814576 17-Nov-2021 14:27

Meh - it is their money - they get to set/change the rules.

If you don't like said rules - don't use it in the way described.

GV27

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#2814581 17-Nov-2021 14:38

boosacnoodle:

This does work - for now - but the Lotto people get pretty annoyed by it and pick it up quickly.

Have also heard of people using this to abuse Airpoints, but that was a while ago.

MileHighKiwi

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#2814624 17-Nov-2021 16:18

This will partly be driven by their ESG policy which is all the rage these days. Gambling is bad, charging you more interest is a way to deter you from being naughty and gambling.

BNZ no longer offer new merchant facilities to bars with pokies for example.*

*terms and conditions apply, its based on % of revenue from the gambling activity.

They also don't offer merchant accounts to legal 'adult' entertainment businesses. American Express don't either.

I think it's a slippery slope. What next, declined card because your liquor expenses are excessive this week?

Handle9

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#2814763 17-Nov-2021 17:54

SirHumphreyAppleby:

OldGeek:

To me it seems the solution is fairly simple - top-up amounts can never be withdrawn. Using MyLotto as an example, the account balance could have 2 components: unspent deposits (top-ups) and winnings. When a purchase is made it is funded first from unspent deposits, then winnings. If there is a win, it is added to winnings. Only winnings can be withdrawn.

That is not an acceptable solution as it encourages gambling. Someone who puts money into gambling should always be able to take it out if they come to their senses, regardless of their financial state or any other factors.

The solution is to target people who are involved in these sorts of transactions and guide them in the right direction. They need to have their credit cards cancelled and be given manageable loans to repay their existing debts. We get calls from the bank all the time asking us to verify transactions, and they clearly monitor this already (or at least claim to), so there is no reason they couldn't put a process in place to target those they perceive to be creating the problem.

This is money grabbing and nothing more. It will also IMO push more transactions underground. Everyday banking is simply becoming too hard.

It certainly makes crypto more attractive. Once there is a mainstream credit solution using crypto banks have some problems.

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#2814781 17-Nov-2021 18:50

On the crypto front, the two dealers I use, require AML info (eg. Drivers license, bank statement etc) to get onboard. I regularly sell Bitcoin and had to go through those loops initially.

It’s worth noting that debit cards can still be used for these purchases moving forward. There is a few references to AML and social implications… having studied the area a bit, there may very well be another factor: risk. Debit cards involve your own money whilst credit cards effectively leverage the banks money. It’s pure speculation but I’d hazard a guess that credit card users who heavily use those services are likely to be at a higher risk of default.

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