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299 posts

Ultimate Geek


#218000 21-Jul-2017 19:22
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Here's a question for my fellow geekzoners..

 

Let's say you apply for a credit card that has an Annual Fee of say $200.. (consider it like a membership)

 

Legally or otherwise, at what stage do you think that "membership" should commence, and the "annual fee" be payable?

 

Should it commence from the date of issue/approval?

 

Or should it commence from the date of activation?

 

Unlike most memberships or annualised service fees (such as Insurance), with credit cards what you're paying for cannot be used at all until it is activated.

 

Therefore, when would be the appropriate time to set the anniversary and/or charge the "annual" fee be?

 

I'd like to hear your thoughts and perspectives..





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3302 posts

Uber Geek


  #1826764 21-Jul-2017 19:28
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How many days we talking between one or the other?  Does a few days really matter?  I would like to think the fee would apply from the day that the credit facility is activated and available for the customer to use.  In reality though I think fees typically apply from the date of application, that being the day that the customer accepts the terms and conditions and agrees.  

 

If all else fails refer to the terms and conditions.   





Always be yourself, unless you can be Batman, then always be the Batman



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  #1826804 21-Jul-2017 19:46
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I would expect it to apply from the time the card was approved. 

 

I'm not quite sure what you're really trying to prove or disprove or the angle you're trying to take but it's a rather strange question - and kinda moot in some ways because pretty much every credit card in NZ charges fees 6 monthly.

 

 


 
 
 
 




299 posts

Ultimate Geek


  #1826831 21-Jul-2017 20:59
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Well, I'm not attempting to prove or disprove anything, I just had an interesting experience which brought about this topic which I had never previously given much thought to.

 

Last month on the 29th of June I applied for an American Express Airpoints Platinum card (to take them up on the $400 Airpoints Promotion).

 

I received an email on the 30th of June advising they'd received my application, and would be in touch in 5 business days.

 

On the 6th of July I was advised via email that I had been approved. That my card was already on it's way, and that I should expect it within 10 working days.

 

On the 15th of July, I hadn't received the card, but was sent an automated email advising me to make sure I enrol online to receive my statements - as if my card had arrived and was active. 

 

On the 18th of July, with no sign of the card, I take American Express up on their tid bit about if the card doesn't arrive within 10 working days, call this number and cite this reference number. So, I called American Express to query the situation. I want to take a moment to mention that they only have a single 0800 number and the first thing their automated system asks you to do is enter your card number. No other options. So I wait thinking it'll time out, and it doesn't, so I press #, and so and so fourth - still nothing. I start pressing all of the buttons and it seems that 0 works which redirects me to an operator (in the US). Great.

 

So I let the operator know what I'm calling about, they ask me the reference number. I provide it. They say they'll have to redirect me to "New Applications".. OK, I'm put on hold and transferred.

 

So I get to someone in New Applications (in the US), and I explain that my card hasn't arrived, and they ask the reference number, and then they advise they'll need to forward me to Card Services. This time, I'm routed to someone in Australia.

 

So a lovely Aussie chick answers the phone, I explain the situation and she starts by saying she'll be able to help, but first.. she'll need to ask me a set of security questions. Firstly my date of birth, secondly my full name, and thirdly my mailing address including city. I answer these, according to her, they are all correct, and she proceeds to access my account accordingly to check the status.

 

She can see that my card hasn't been activated. She said it should have been delivered around the 12th of July at the latest (assuming she's handled many cards going to New Zealand). So she offers to resend a card via DHL, which will take 2 days and will require me (and only me) to sign for it. So, figuring that it has been lost in the mail, she confirms my address and city once more, to which I confirm and advises she'll call me back later that afternoon with a tracking number.

 

She doesn't end up calling me back for whatever reason, but she had definitely cancelled the previous card, ordered a new one, and had it dispatched. I could hear it in her voice that she was committed to solving this issue.

 

So, for those of you keeping stock, that means the replacement card was due to arrive via DHL on Thursday the 20th (yesterday). It didn't.

 

But guess what did arrive on Thursday via New Zealand Post? The original card. Classic.

 

Immediately, upon review all of the stamps and special writing all over the front of these two envelopes from American Express I could see how this went pear shaped.

 

For whatever reason, American Express decided that Auckland and postcode 1010 were now in Waihi. Even though on the application I specified the city as Auckland, and the postcode as 1010. My address had been set to (of all places?) Waihi with postcode 1010, New Zealand.

 

I've got to give New Zealand Post credit, somehow, although it took a while, they had managed to get the mail to the right destination in the end.. Even if it did have to travel from Auckland to Waihi and back again. Worse still, as you've probably deduced.. Guess where they sent the DHL package? Waihi. In hindsight, I think it would be wise for Amex to consider using New Zealand Post's address validation lookup during their on boarding process to avoid back office rekeying mistakes like this altogether.

 

So as the original card had been cancelled, I call American express and go through the above painful 3x operator process again.. to let them know that a) I've discovered the reason why it took so long, and b) determined why DHL hasn't turned up yet.  

 

The odd thing is, again, when I call, they ask me the same security questions. Again, I provide my Auckland address, and they accept that answer. Until I point out it's the reason why the mail isn't arriving. They can't explain why their system determined my address to be Waihi, but sure enough, they provide me with the DHL tracking number to whom I call. They said the package has been sent down to Waihi, but left there because they had no idea how or who to send it to. Now that I've corrected it, the package is due to arrive on Monday the 24th of July.

 

Now with the back story in tow, here's the interesting part. While chatting to the Card Services fella in Australia, he mentioned my anniversary date as the 4th of July (must have been the day I was approved). But what I can't work out is, shouldn't everything such as account fees, anniversary date etc be set from the day you activate the card? I get it, as previous posters have outlined, 5-10 working days, who cares right - but if you think about it, are credit cards the only financial service where you are billed for something before you've even activated it for use?

 

If credit cards are essentially credit, shouldn't interest, fees, and any type of contract begin the day that you activate the card (thereby "accept" the agreement)? 

 

I know, details, but I was thinking, by the time my card actually arrives, I would have lost $10.96 worth of my "annual" membership/service/access (whatever you want to call it). [($200 / 365 Days = $0.55) * 20 Days = $10.96]

 

Now, you're probably thinking "who cares", "chump change" etc, until you consider their $1200 card. In which case, 20 days of "access" to their services is worth $65.75.

 

So, now with a bit of perspective, I'm keen to understand whether I'm alone in thinking that to keep it fair on consumers an anniversary date or membership date should begin from the day the card is activated rather than the day it is issued?

 

I know my case is 'super outlier', but I had never previously considered that credit card companies are actually charging you for service before you can even use it. I know it wouldn't stand up for telcos or insurance companies, so curious to understand why it is accepted with credit card companies? Welcoming insight and thoughts.





Tesla Model S P100DL / Model 3: Feel free to private message me if you need advice buying an Electric Vehicle (EV).
If my advice has been helpful, or you just want free stuff with your purchase, use my referral link to buy your Tesla.


3302 posts

Uber Geek


  #1826848 21-Jul-2017 22:45
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And you wonder why hardly anyone uses or accepts American Express.

 

 Now, you're probably thinking "who cares", "chump change" etc, until you consider their $1200 card. In which case, 20 days of "access" to their services is worth $65.75.

 

I don't follow this logic at all.  The card costs you $1200 a year in fees?  You appear to be counting a loss that you never incurred. Did you actually put your question to them and ask for the date to be amended or some compensation for your inconvenience?  Maybe they would change it as a measure of good faith? Problem solved.   

 

Otherwise sometimes stuff ups happen despite the best of plans.  Suggest you find a way to move on, it's just not worth it.  

 

 

 

 





Always be yourself, unless you can be Batman, then always be the Batman





299 posts

Ultimate Geek


  #1826855 21-Jul-2017 23:28
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scuwp:

 

And you wonder why hardly anyone uses or accepts American Express.

 

 Now, you're probably thinking "who cares", "chump change" etc, until you consider their $1200 card. In which case, 20 days of "access" to their services is worth $65.75.

 

I don't follow this logic at all.  The card costs you $1200 a year in fees?  You appear to be counting a loss that you never incurred. Did you actually put your question to them and ask for the date to be amended or some compensation for your inconvenience?  Maybe they would change it as a measure of good faith? Problem solved.   

 

Otherwise sometimes stuff ups happen despite the best of plans.  Suggest you find a way to move on, it's just not worth it.

 

 

Re: the "access" comment, I'm just putting it in perspective that they charge you $1200 because you attain a host of additional benefits such as Travel Insurance and Lounge Access. However, the Travel Insurance cover is only good for the 12 month period that you pay $1200 for. If the first 20 days you do not have access to, or the ability to use the card, then technically, you are not getting 12 months of access to those card benefits. When the card stops being just a credit facility, and instead comes with additional benefits such as lounge access.. these are things that you are contributing towards by paying $1200. Not having access to them, or being short changed for the length of time you have access to those benefits is what I'm referring to. Hopefully that gives my comment around access a bit more context?

 

Re: Acceptance, I also thought it was hardly accepted anywhere until someone mentioned it's accepted by Paypal, Expedia and the Apple Store. I highlighted the customer service experience in my story because I wanted outline the card fees Amex charge do not reflect localised services, and is probably part of the reason my card ended up in Waihi.

 

Re: Compensation/amendment, I haven't asked for anything from them, I don't really intend to. As per the original post, I'm more intrigued by the premise of credit card companies using the "approval date" as the anniversary date instead of the "activation date". I was hoping some legally/financially informed individuals may have insight into why it is the approval date and not the activation date? Is there a technical reason perhaps? If the approval date is the anniversary date of the "contract", how can they call it an "annual" fee if the date of the card activation is technically the point at which the consumer accepts the terms and conditions/contract? 

 

I've never cared for things like card fees before now because a) every New Zealand bank or financial institution I've dealt with has had a card out within days of application (so you tend to move on with life), b) I've never owned a credit card with card fees over $50 (or at all), and c), frankly (and it seems the feeling is resonating with some forum goers) who cares, right?

 

But for those who are intrigued by the concept of companies being able to charge for fixed term services that absolutely cannot be used by their end user until delivery and then activation, I'm keen to hear further thoughts.





Tesla Model S P100DL / Model 3: Feel free to private message me if you need advice buying an Electric Vehicle (EV).
If my advice has been helpful, or you just want free stuff with your purchase, use my referral link to buy your Tesla.


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