Check your credit card statements thoroughly, (especially Woolworth/Qantas).

Just a word of warning, particularity if you have a Woolworth Qantas credit card.

Like many people, I use my CC for pretty much all purchases and have it set up to pay off in full by direct debit each month.

I've had this card for maybe 3-4 years and always done it this way.

Very occasionally I get an interest charge show up on the account for a dollar or two. I questioned it in the past as I pay off automatically every month so wondered why there would ever be an interest payment. I was told that some charges can be classed as "cash advances" at times, which have no interest free period. I never looked into it any further as it was only ever a few dollars here and there.

Today, I check my statement and there's a $100+ interest charge for "Cash Advance". Now, I NEVER EVER get cash out on my credit card.

I called customer services to check, they explained that:-

In October, Tatts Lotto took a $2.50 processing fee for kindly selling me an $18 lotto ticket.

That fee went onto the card as "Cash Advance - Tatts Lotto".

Now, the total bill for that month was around $2000 and the direct debit was set to pay the bill off in full.

What the guy told me was, from my direct debit the "Cash Advance" of $2.50 is taken out first, leaving only $1997.50 toward the credit card bill. Then, because the bill isn't paid in full, interest is applied ON THE WHOLE BILL!!! So, that $2.50 Tatts Lotto processing fee cost me a further $100 in interest.

He agreed it was ridiculous, especially given that my account is set up to automatically pay in full each bill, so it is an issue with how they process payments.

He has arranged to refund the interest charge in full.

This has only happened since Woolworths Credit Cards were sold from HSBC to Macquarie, so seems there has been a change in their system somewhere.

So, if anyone else has a Woolworths CC just be carefull with any transactions that show up as "Cash addvance" and if you get charged ineterst, make sure you get on them for a reversal.
 
That's EXACTly what happened to me a few years ago

Put everything on cc
Pay off every month
Used to purchase lotto on card
Then one day, bang, massive interest charge
Got it waived, never bought online again


Basically, many lotto tickets have been classified as cash advances, which is totally stupid in my mind. Doesn't make any sense

And that's how credit card works, if you pay 999 off 1000 off, you get charged interest on the full balance
It's really deceptive in my mind

If you ask your bank, they might waive it for you
 
Yep, they waived it.

Amazed me though, it's essentially theft by deception in some form.

By setting up to pay the full amount by direct debit every month, then that's what should happen.

There is no option to tick that says pay full amount PLUS any extra amount to avoid interest payments. Full amount, is full amount, is full amount (apparently not according to the card company).

If they are doing this as a rule, then there must be heaps of people that have their accounts set up to pay in full but never check their spending or statements. I know most of my friends don't. They wouldn't know if they were being charged interest, they'd assume, (as I did) that by setting up your direct debit you wouldn't have to worry about interest bills.

I guess I'll have to keep an eye on this now as I've probably bought one ticket a month since October, no doubt I'm going to get the same interest bill now until we catch up to December.

Cheers.
 
Buying betting tickets must be paid in cash hence it becomes a cash advance otherwise you have breached the racing and gaming act which makes it illegal to engage in credit betting.

Then like any other cash advance, these charges are paid first followed by the outstanding balance. I can't understand why your account was debited less than the total outstanding balance.
 
Then like any other cash advance, these charges are paid first followed by the outstanding balance. I can't understand why your account was debited less than the total outstanding balance.

I've no issue with the cash advance aspect. It's the way the process the payments that's the problem.

My account WASN'T debited for less than the total outstanding balance, it was debited for exactly the outstanding balance.

The way the chap explained it to me was that, for example, say the outstanding balance was $2000 and of that $2.50 was a "cash advance".

They debit the full outstanding balance of $2000 from me, but then they take off their $2.50 cash advance from it first, which means only $1997.50 is left, which technically doesn't cover the closing statement amount of $2000, (even though the $2.50 that they've taken should be knocked off the statement amount as they've already take it, if you follow?).

So, because the amount they now credit against the account is only $1997.50 and not the full $2000, (even though they take $2000 from you) it has technically fallen short of the statement amount and they charge you interest on the whole $2000.

Ridiculous system as there's nothing you can do to circumvent it, unless I suppose you make an additional manual payment every month to ensure you pay more than you should to cover any cash advances?

It must happen all the time as the customer service guy agreed it was a stupid system and immediately credited the interest charge back to me before I even got chance to ask him to.
 
Maybe pay an extra $10 each month when making payments into the card. This should give you a bit of a buffer.

Absolutely, that's exactly what I'll be doing from now on.

Just amazed in 20 years of having credit cards that this has never cropped up for me before, and amazed they are allowed to get away with it. As far as I'm concerned, ticking the pay in full each month box should essentially safeguard you from any interest charges?

Interestingly, my Macquarie card seems to be a bit too high this month and doesn't match my spreadsheet. The statement hasn't updated as yet. I'm wondering if the same thing has happened on that one.

Woolworths were owned by HSBC and were taken over by Macquarie around September time from memory. Could be that it's a Macquarie thing which is why I'd not seen it happen before on this card.
 
Just amazed in 20 years of having credit cards that this has never cropped up for me before, and amazed they are allowed to get away with it. As far as I'm concerned, ticking the pay in full each month box should essentially safeguard you from any interest charges?

Its a trap to extract more money from people.

Paying balance in full will not save you because there is interest which is being charged but won't be credited to the account yet.
 
Its a trap to extract more money from people.

Paying balance in full will not save you because there is interest which is being charged but won't be credited to the account yet.

You're not kidding it's a trap!

I've just set up a couple of BPay's for all my cards, I'll whack in an extra lump mid-month each month just to make sure I'm well over the auto-debit statement amount each bill time.

I keep very accurate records of my accounts, (I'm a bit OCD like that), I'll get them close to zero manually from now on.

Cheers.
 
the frist time I ever did a cash advance was by accident, went to a local pub and withdrew $20, I either pushed teh credit button on the atm, or it didnt give me an option,

man that following month was painful, I paid off $25 the next day thinking it was ok, got charged interest,
paid another $500 just to be sure, got charged interest

even the bank person couldnt explain what I had to do to not get charged full interest on the full baalance , she made it sound as though once I do a cash advance, even for $1, then the only way to not accumulate interest is to pay the ENTIRE balacne off the next day!!

whcih is ludcirous
 
How do your auto payments work? Does it pay off just the new charges that are due, or the entire balance of the card?

The way the auto payments were explained to me on my card (when I rang to confirm) was that it paid off the entire balance, (or the minimum amount). Not the new charges.

Which is dumb, because it means you are paying off extra you don't need too.

I just wanted to pay of the new charge amount needed to avoid any interest charges. But perhaps that is actually how it works and I misunderstood. I just have a calendar reminder and log in and pay it myself atm.
 
the only way to not accumulate interest is to pay the ENTIRE balacne off the next day!!

whcih is ludcirous

I checked that same thing with my CC company and they said that any payments get applied to the cash advance first.

I have done a cash advance when my debit card was not working and then transferred the money online between accounts on the spot and aside from a small extra charge I had no interest fees.
 
How do your auto payments work? Does it pay off just the new charges that are due, or the entire balance of the card?

The way the auto payments were explained to me on my card (when I rang to confirm) was that it paid off the entire balance, (or the minimum amount). Not the new charges.

Which is dumb, because it means you are paying off extra you don't need too.

I just wanted to pay of the new charge amount needed to avoid any interest charges. But perhaps that is actually how it works and I misunderstood. I just have a calendar reminder and log in and pay it myself atm.

It pays off the "statement" amount, which is always a bit behind the current balance when the statement comes out, so it never really zero's. If it's always been set up this way though, (which mine has), you should never get interest charges (apart from genuine cash advance interest based on days between advance cash out and statement date if you know what I mean?).

The issue with getting the charges I got was purely down to how they process the payment they received form you, taking back their cash advance first but not deducting that from the total statement amount so is basically means the statement amount they take from you, less their cash repayment doesn't then cover the statement amount which still includes their cash payment, they then charge you interest in the WHOLE statement amount - confused? I am.
 
so have they double dipped? If they take the payment for the cash advance first (normal practice) but this was already included in the amount of the statement (excepting interest accrued)?
 
so have they double dipped? If they take the payment for the cash advance first (normal practice) but this was already included in the amount of the statement (excepting interest accrued)?

Seems that way.

I mean, they take the cash advance first, fair enough, but they then should deduct that amount form the statement amount as they've already taken it? But, the statement amount doesn't reduce, so once they've taken their cash advance form your payment your payment is technically short by the cash advance amount, based on the statement amount, (as they don't reduce the statement amount by the cash advance value). Does that make sense?

EDITED TO ADD - the result for me was that I was charged $102 in interest for a $2.50 cash charge, even though since day one this card has been set up to pay the statement amount every month by direct debit.

It's a big con job as they then apply interest on the entire statement amount.

Wouldn't bother me so much if there was a way around it, like a tick box on your repayment instruction to say "pay off statement amount PLUS any cash advancements" - or better still, charge you properly and reduce the statement amount by the cash advance that they take out of it, (again if you follow?)

They must be making a killing from this.

EDITED TO ADD - actually, no, not double dipped as such as it does equal out at the end, it's just the process they use to take their cash advance out results in you paying interest on your entire statement balance, unfairly, as only a fraction of it is cash advance.

They obviously know about it as the customer service guy immediately refunded it without prompting and didn't need to escalate it for authorization.
 
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