News & Views - Savantor

Where should the industry draw the line?

Friday, 14 December 2012

We know that Christmas is supposed to be a time of goodwill to all but it seems that credit card company Creation is stretching this concept to the limit. It has been sending out flyers in the post encouraging customers to withdraw money from ATMs this Christmas, despite the obvious huge cost in doing so.


These flyers are encouraging cardholders to "pop down to your local ATM and use the cash facility on your card". The flyer then carries on to say that "You can withdraw up to £300 a day" and suggests that this will "Make this Christmas magical!" Well magical may not be the adjective used when the credit card bill arrives in January.


Using a credit card to withdraw cash will cost a cash handling fee of 5% of the amount withdrawn or £5, whichever is greater. The cardholder will also pay interest from the minute the cash leaves the ATM until repayment, as there's no interest-free period for cash advances. The interest rates vary from card to card and from customer to customer depending on credit rating but 20% - 40% is not unusual. The only mention of this in the flyer is in the terms and conditions which state that "Account terms and conditions apply". If the cardholder doesn't want to withdraw the money from an ATM themselves, then Creation will transfer it into the cardholder's bank account for them using a premium rate phone number.


Creation issues credit cards for a number of brands including Asda who have denied any knowledge of such communication to cardholders. Other brands include Flybe, Marriott, Maximiles and various football clubs. It also has its own range of branded credit cards. At a time when many are already struggling with the cost of Christmas, this seems like a less than charitable piece of promotion and potentially reflects badly on the rest of the industry at a time when it can least afford it.

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