Halifax Clarity Card - Please read and help me make the OFT aware of this issue!

[sarumane]

Hi All

 

I took out a Halifax Clarity Card as it often appears in moneysaving expert top picks for using abroad.

 

Every holiday, I took my card and withdrew cash, repaying on return. I must say that the product is excellent and the rates and exchange rate are great. In January, I did a big trip and took over £1000 over ten days. Halifax dropped my credit limit to just above my balance. They wouldn't tell me why and eventually my credit limit was restored to a third of what it was. They did this on the last day of my trip and I was just lucky I didn't need any more cash.

 

In April, I was again on holiday in the UK and withdrew cash. They dropped my limit. They were quicker at restoring it this time but again it was to the lower level.

 

I spoke to a friend who works in the industry and they immediately stated 'That will be your Delphi score'. Apparently, there is a computer algorithm built into credit scoring that works out your likelyhood to default and one of the risk indicators is choosing to withdraw cash from a credit card.

 

I contacted the Ombudsman and OFT. I highlighted that removing cash - fee free and at their best exchange rate was surely a benefit of the card and I did not see why I should be penalised fo this. The Ombudsman was useless, stating that it was part of credit scoring so they could not comment. The OFT stated that they did not deal with individual cases.

 

My friend also told me that it would affect not just my profile with Halifax, but with everyone. I then applied for a number of financial products to compare the rates I got compared to last year. I would add that my financial peosition is stronger this year, with no other adverse information and reducing loan balance paid on time.

 

Last year I was offered 0.3% BELOW Tesco's headline rate, this year I got offered 9.9% when the rates were 6.1%. Sainsbury's 9.9% compared to 6.4%. Zopa accepted for a loan, this year declined.

 

I have noddle for accessing my credit report and I noted that theit guidemark score of me went from 5/5 to 3/5.

 

I suggested to Halifax that they might want to consider reporting the product on credit files as a revolving loan to avoid this problem. They weren't interested, although they did acknowledge that it was likely that their computer kept lowering my limit because I was removing cash from the card, calling this an unexpected side effect. They also suggested that I don't remove cash, but were unable to say why they made it a benefit of the card but did not tell customers that it would ruin their credit score. As there is no charge for cash withdrawals and it is at the same interest rate, the card is clearly making withdrawals on a close par to transactions (minus the interest free period).

 

I write all this as the OFT will look into it if it has affected more than just me. Maybe you have had a similar experience? If so please contact the OFT and Ombudsman to try and get this unfair practice changed.

 

Thanks

 

Saru

[citizenB]

So, the withdrawing of fee free cash is advertised as one of the "benefits" of the card - However if you do this it will affect your credit scoring ??

 

Surely this is mis advertising or and unfair term.

 

Do you have a copy of the terms and conditions !

[sarumane]

Hi All

 

Made a complaint about T & C's, however, as another poster stated there reply was literally 'What you going to do about it? You can bank elsewhere'. The Ombudsman supported them.

 

Regards

 

Saru

[DnT]

That's horrendous, I'm suprised there's not been more posts on this!

I've recently got one because I was talked into it during a visit to a branch. I said I have enough cards really, I only use two of them because of the benefits but they said that this one allowed me to spend overseas without any additional charges which the others do not. Since I'm soon to be going into Europe I thought it was a good idea. Glad I know about this now and will make sure I don't use it to get cash!!

[overdone]

I think all credit card companies monitor you cash withdrawal rate. It is considered an indication of being short of money.

[Scrapper]

I think all credit card companies monitor you cash withdrawal rate. It is considered an indication of being short of money.

 

Overdone is correct. All credit cards monitor cash withdrawals very closely as this is usually a sign your out of cash and more likely to default on them. It is nothing new.

 

I've had this conversation with a Banking friend of mine.

 

Cheers

Scrapper Coco

[Inspector Gadget]

I had a Halifax credit card and can safely say that Halifax are the worst credit card provider I have known.

I now have a Tesco card, which causes me no pain.

[Scrapper]

I now have a Tesco card, which causes me no pain.

 

Until you miss a payment then your see how good Tesco's really are. I've been to hell and back with them and their crap.

 

3 years and counting and even after FOS ruled in MY favor I'm still having to fight them.

 

Cheers

Scrapper Coco

[cplatten]

I'm jealous that you even got a Clarity card in the first place.

 

We applied for one because we spend at least a month a year in the U.S. and would like to be able to save some of our credit card charges. That card got a great write-up on MSE for that very reason.

 

Imagine our shock when we were turned down for it despite having a perfect credit rating and a good household income. Neither my husband nor I have ever been turned down for a card before.

 

Halifax have some strange assumptions in place as to what they want their perfect customer to say and do...

[branney]

i am shocked by this as i have taken cash out on holiday before from my credit card, due to it being zero charges (just interest). my debit card on the other hand charges me something like a couple of quid (and a loaded conversion rate!).

 

it is surely safer than carrying around a lot of cash, but if they were to lower my credit limit while on holiday this would ruin the holiday!?

 

if i have cash remaining in my bank account, would they not be able to see that i have not run out of money?

 

seems they just want to use these offers to get customers, not to actually have people use the facility? in which case can it be taken up with the Advertising Standards Agency?

 

in the past i transferred cash to my credit card the same day as withdrawing it, so as to prevent interest. could this be why my credit limit was not lowered? seems i may need 2 credit cards in future, one for cash (which i would pay off the same day) and another for purchases (which i would pay off once the statement was generated)