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)

Talkiet

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#290518 16-Nov-2021 21:36

Has anyone else received this Grade A, over the top, pile of BS from their bank?

I wonder who gets to decide what a Quasi-cash item is... Is gold bullion? How about a coin collection? How about a piece of art?

Presumably there is some regulatory over-reach in the background and all banks will shortly allow only whitelisted retailers to process CC transactions, but I wondered if this was common to the rest of the banks yet?

Please note all comments are the product of my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

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#2814071 16-Nov-2021 21:40

Yes. Westpac by any chance?

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#2814074 16-Nov-2021 21:46

what the heck?

Involuntary autocorrect in operation on mobile device. Apologies in advance.

Talkiet

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#2814076 16-Nov-2021 21:49

It's interesting. I cannot fathom that a bank, with all the regulation on them, will have done this on a whim - but not even including a proper definition of quasi-cash, who determines it, and a method for appeal of such definitions smacks of a hurried process. I'm going to ask them tomorrow for a proper definition of quasi-cash and process for determination/appeal, and when they refuse, I'll make the request in writing CCing the banking ombudsman.

Cheers - N

Please note all comments are the product of my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Senecio

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#2814079 16-Nov-2021 21:50

Sounds perfectly reasonable to me. If you’re topping up an online account (eg. TAB) you’re not making a purchase. Effectively you are withdrawing cash from your credit account and depositing it in another account. Therefore they are treating it like a cash advance.

I’m only surprised it hasn’t been locked down previously.

Talkiet

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#2814086 16-Nov-2021 21:55

Senecio: Sounds perfectly reasonable to me. If you’re topping up an online account (eg. TAB) you’re not making a purchase. Effectively you are withdrawing cash from your credit account and depositing it in another account. Therefore they are treating it like a cash advance.

I’m only surprised it hasn’t been locked down previously.

Coin collection, music voucher, ounce of gold (for making in a ring, not resale or investment), bag of sugar from the dairy that you return unopened after getting a call (STILL STANDING AT THE COUNTER) from your wife who just said she got one on the way home, and they give you cash from the till for it.

What about if you buy 2 video cards instead of one because your mate got you to pick one up while you were there and they happened to be in stock - he'll pay you cash when you give it to him.

This is either incredibly ill considered, or Westpac has chosen to be opaque about the definitions and rules.

Please note all comments are the product of my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Senecio

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#2814090 16-Nov-2021 21:58

Every example you just gave is a purchase, not a cash advance. What happens after you have purchased something is irrelevant.

Talkiet

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#2814094 16-Nov-2021 22:05

Senecio: Every example you just gave is a purchase, not a cash advance. What happens after you have purchased something is irrelevant.

From Westpac's website... (My emphasis)

-snip-

If you withdraw cash on your credit card or use your credit card to purchase goods or services that are similar or easily converted to cash (otherwise known as “quasi-cash” transactions), interest is charged every day. This includes the day you make the withdrawal or transaction until the date you pay the transaction off in full. The interest rate on cash advances is usually higher than the rate on purchases.

Quasi-cash transactions include but are not limited to, (i) the purchase of travellers’ cheques, foreign currency, cryptocurrency and securities, (ii) making a money order or wire/telegraphic transfer, (iii) buying or loading value on gift cards or prepaid cards, and (iv) making gambling transactions or funding gambling accounts.

-snip-

I'd have a good stab at arguing that a music or petrol voucher is a gift card of some description - I'd also easily argue that an ounce of gold is easily converted to cash and Westpac strongly imply that they are reserving the right to declare other things as 'quasi-cash' transaction in the future.

Please note all comments are the product of my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

WyleECoyoteNZ

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#2814097 16-Nov-2021 22:11

Good Luck.

I'll admit, I'm a little annoyed by it. I use my CC to top up my snapper (about $40 per week). I'd use a Self service kiosk, but they are few and far between.

May have to look at other options, e.g debit card, taking my banking elsewhere.

cokemaster

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#2814098 16-Nov-2021 22:12

I haven't received the notice myself, but it will probably change the way I route some of my spending...

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Nate001

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#2814100 16-Nov-2021 22:13

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.

mentalinc

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#2814103 16-Nov-2021 22:19

Sure you can use TAB and My Lotto as a cash advance service.. I would have thought they would track and monitor people who were basically using their service as a ATM?

But if you buy the products from those two companies in a store, you get the same product (if not use them like an ATM service) with no cash advance fee?

I'd love bank to buy my old quasi-cash lotto tickets back for face value :)

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cokemaster

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#2814105 16-Nov-2021 22:23

@mentalinc - TAB and MyLotto would have obligations under AML I would think. They'd also take a fairly dim view as they'll be incurring fees processing the payments from credit cards.

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nztim

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#2814112 16-Nov-2021 23:20

The reason they are doing this is

People with CC debt are topping up Lotto , TAB or PayPal accounts, draw down on them and then paying back the credit card

When you pay down a card it goes to the oldest transaction first, therefore eliminating internet bearing transactions and banks lose legitimate interest they are entitled to.

So by charging interest immediately and at the cash advance rate it deters this behaviour

Any views expressed on these forums are my own and don't necessarily reflect those of my employer.

michaelmurfy

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#2814115 16-Nov-2021 23:32

nztim:
So by charging interest immediately and at the cash advance rate it deters this behaviour

This is where I disagree - it is causing more harm than good as these types of transactions can come out of desperation (for example, TAB or Lotto or other gambling).

There has been changes to the CCCFA which means lenders have to know their customers better to 100% ensure that a credit card for example is the right thing for the customer - https://www.consumerprotection.govt.nz/general-help/consumer-laws/credit-contracts-and-consumer-finance-act/

Charging a cash advance fee on these transactions may deter some, but won't deter most (for example, those who already cash advance their credit cards) and I think this can impose more financial hardship. I can see charging cash advance fees for things like Crypto / Sharesies etc makes sense but charging a cash advance fee for a Lotto ticket? Give me a break, this is totally a cash grab from Westpac.

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nzkc

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#2814117 16-Nov-2021 23:51

michaelmurfy:

Give me a break, this is totally a cash grab from Westpac.

Absolutely this.

If (huge IF) this were for some social good, the bank would be making sure we all knew this. It would be all over the letter.

I'm not with Westpac. If I were I'd be moving banks, which is easier than most assume. Out of principle not because it'd hurt me personally in the pocket any. Actually I'd have left when they removed pay wave off phones.

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