The BA American Express interest rate goes up, and why I hope you couldn’t care less

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• Ralph says:

  21 Aug21 August 06:07

  Sage advice Rob.
  Two golden rules of miles collecting:
  ALWAYS pay your card in full
  NEVER buy something you wouldn’t have otherwise bought just to get miles

  • cheekychappie says:

    22 Aug22 August 00:02

    My new method to churn the £s to hit spend targets involves precisely this. You buy something & sell it on. Perfectly legal & all in the cloud (ie no physical goods). Seems fairly easy to turn a small profit as well.

    Still testing it out though, to work out a few sensible ground rules.

• James Ward says:

  21 Aug21 August 06:07

  When did you get your FSA authorisation? That’s new!

  • Jordan D says:

    21 Aug21 August 07:52

    Was thinking the very same – new line on the disclaimer …

    • cheekychappie says:

      21 Aug21 August 08:37

      Hmmm…

      Probably sensible precaution/ just covering his back to deflect some future idiot from suing.

      Or is it more worrisome?

      • Rob says:

        21 Aug21 August 10:16

        Let me explain,

        Under FCA regulations it is ILLEGAL to link to a credit card website if you do not have a credit licence. I know this sounds mad but it is true. It is IMMATERIAL whether or not you have a commercial relationship with that card company.

        The bottom line is this:

        You can say ‘The Emirates credit card is great’ and that is OK. But, if you have a hyperlink under the words ‘Emirates credit card’ then I am, technically, introducing you to the Emirates card. And that is illegal unless you are licenced. Even though MBNA does not pay anyone, let alone me, for referrals. This is why the personal finance sections of newspaper websites do not directly link to the companies they mention.

        Because I have a long list of financial services qualifications, was FSA regulated in my old job for 16 years, have held a board level position with a major FSA regulated company and am one of the very few people to be a Fellow of the Chartered Institute for Securities & Investment, the FCA cut me some slack for a time. (Weirdly, I was qualified to advise Amex on taking over Visa but not qualified to advise my Mum on getting an Amex card.) However, they eventually said that I had to get a licence or, alternatively, pull every credit card hyperlink from the site.

        So, voila, £600 and 12 months later I now have a credit broking licence and I am now legally allowed to give opinions and advice on credit cards. Nothing changes except the small print and the fact I now have to give the FCA a chunk of the site revenue! You may have spotted that I had already changed the card articles to meet guidelines on highlighting the APR clearly.

        • James67 says:

          21 Aug21 August 10:33

          I hope the £600 outlay may keep the wolves that grudge you your commissions and referals at bay for a while.

        • Rob says:

          21 Aug21 August 10:37

          I got another FCA bill for £259 yesterday! I genuinely have no idea how they work out the ongoing fees – I can’t do much about it so I just pay them. At some point I will also be getting a visit from an FCA inspector – presumably at my office in the Kings Road Pret or, as I am at the moment, a cafe in Notting Hill – to check my disaster recovery plan, that my client records are secure (don’t have any, obviously!) etc!

        • Worzel says:

          21 Aug21 August 10:46

          🙂 .

        • cheekychappie says:

          21 Aug21 August 11:06

          Thanks. Hard luck on the fees and to an outsider seems a bit unfair but at least you’re covered.

        • cheekychappie says:

          21 Aug21 August 15:16

          Best to cover arse. Multiple is not equal to one-off.

        • cheekychappie says:

          21 Aug21 August 15:18

          So did Amex contemplate taking over Visa?

        • Rob says:

          21 Aug21 August 15:42

          Er, no. That was just an example!

        • Rob says:

          21 Aug21 August 15:48

          I had this very discussion with the FCA. They went away for a think and never did answer the question.

          You may not have noticed, but for 3 months there were no card links on the HFP ‘Credit Cards’ page until the last bit of my licence was finalised. This was done at the insistence of the FCA who would not issue the licence whilst I was technically in breach.

          They also asked for the refer a friend references to be removed. I challenged this on the identical grounds you mentioned and they did not respond (although they acknowledged receipt of my challenge) and neither did they repeat the request for the references to be removed – so they stayed.

          In theory, refer a friend is meant to be for personal use. It is the equivalent of me recommending my credit card to my mate in the pub, which clearly is not illegal. Amex does NOT encourage you to put refer a friend links on websites. Sending email referrals is fine as that is a private thing between two friends. The grey area is Facebook where you can post a refer a friend invite on a page which is publicly visible – at some point the FCA may ask Amex to withdraw that option. If they do you can probably blame me.

        • Lee Thornton says:

          22 Aug22 August 09:14

          But what about all the websites which have hyperlinks to credit cards through advertisements (such as banner ads)? Wouldn’t this also be illegal under the FCA logic outlined here?

        • Rob says:

          22 Aug22 August 11:21

          No, because the ad is placed by the card issuer who is already authorised.

          In general, regulatory thinking has not moved on to cope with the times. Take the Virgin, Etihad or Emirates credit cards. Virgin, Etihad and Emirates are credit brokers on behalf of MBNA. If I link to the Virgin Atlantic website page for the credit cards, which I do, I am linking to a credit broker and NOT the issuer. Do I really need to be a broker just to link to another broker?!

        • Wally1976 says:

          24 Aug24 August 12:14

          I hope the FCA accept pay.com cards 😉

        • Rob says:

          24 Aug24 August 12:30

          Good point, didn’t try!

  • James67 says:

    21 Aug21 August 11:48

    Love it, lol, please just give them the adress without spelling out it’s a pret or whatever! If the costs get out of hand can you not just get around it by spelling out the link without the hyprrlink? More messy but Im sure readers would understand as only the financial products would be affected.

  • Joker says:

    21 Aug21 August 15:17

    FSA is the Food Standard Agency

    • Rob says:

      21 Aug21 August 15:43

      It used to be the Financial Standards Authority before the FCA sprung into life!

• Dynamo says:

  21 Aug21 August 06:44

  I’m about to hit the £10,000 241 on the premium card. After I hit it can I cancel the card? Will the 241 voucher stay on my BAEC account for 2 years regardless?

  • MattChaps says:

    21 Aug21 August 09:24

    I was recommended to just trade down to the free BA Amex card in case there are any issues when you redeem the voucher, or if you need to change the booking at some point.

  • Grimz says:

    21 Aug21 August 09:38

    Don’t cancel it just downgrade to the free card to be safe

  • BP says:

    21 Aug21 August 10:15

    Yes it will remain on your account after you cancel. You will need another Amex card to pay the taxes when using the voucher.

  • dynamo says:

    21 Aug21 August 10:23

    Many thanks for the advice although some is conflicting. If I downgrade to the free card until I use the 241 it means that I cannot reapply and collect the bonus for a long time.

    • Grimz says:

      21 Aug21 August 15:52

      Yes that’s correct, Raffles would advise this route as i have done the same.

  • will says:

    21 Aug21 August 23:47

    You must pay with an amex card (amex issued I assume) – technically in your name. I’ve completely cancelled mine, and paid using a supplementary card in my name on my partners amex account – no issue at all.

• James67 says:

  21 Aug21 August 07:10

  Good post Rob, particularly to curb possible overenrhusiasm of new readers of HfP who are also new to the points and miles game. Might be worth adding a small additional paragraph warning of the dangers of the interest trap on balance transfers and spending which is easy to fall into, particularly with the mbna cards. Sa.e issues apy with cards such as Etihad which offer interest free period on flight purchases.

  • JQ says:

    21 Aug21 August 07:16

    What’s the interest trap with balance transfers? 2 weeks before the 0% ends, apply for a new 0% card and transfer the balance. If unsuccessful, pay it off.

    You need to be organised with your money before you even start thinking about miles and points. Maybe someone should make an app for stoozing similar to Awardwallet

    • James67 says:

      21 Aug21 August 10:45

      If you spend on the card tve balance transfer or the flight spend on the card is no longer interest free unless tvere is also an interesr free period for spending.

• JQ says:

  21 Aug21 August 07:11

  Why don’t more companies offer products like Amex’s charge cards which earn points but aren’t really associated with borrowing? Or to rephrase, why do you need to spend someone else’s money in order for merchants to be charged fees and you to earn rewards?

  • Joe says:

    22 Aug22 August 07:41

    I’m glad they don’t as Amex have refused to help me with a merchant dispute in the past based on the fact it was paid with a charge card not a credit card!

• Matt says:

  21 Aug21 August 08:15

  Dammit, applied only yesterday for the card with the normal 18k bonus…if only I had waited a day.

  • Rob says:

    21 Aug21 August 12:04

    Apparently, if you ring up Amex to complain they will credit you with the extra points. Someone told me today that they had successfully done this yesterday.

    • Matt says:

      21 Aug21 August 15:19

      Wow, good to know. That’s big of them, seeing as how they’re presumably not under any obligation to help out. I’ll give it a go, thanks!

      • Jason says:

        23 Aug23 August 09:34

        Amex are the best card provider I’ve ever had the pleasure to use.

• Ian H says:

  21 Aug21 August 09:15

  A word of warning for people taking out a new BA Amex.

  Signed up in June. First statement was mid-July. Paid off the full balance (around £2,500) except £16 which I was expecting a refund for. My next statement was issued before that £16 had been refunded.

  The next statement showed an interest charge of around £40. Rang them up, and Amex explained that they charge interest on the FULL AMOUNT (in this insance £2,500) if the full amount isn’t paid off. I was expecting interest on the £16, not £2,500. Even if youpay a penny short, you pay interest on the full amount.

  I’m fairly certain this isn’t the case for other credit cards (had a Lloyds duo card for years and never encountered this, as well as other cards over the last 20 years), but maybe I just didn’t notice, or always paid the balance (I always pay the full balance except in rare circumstances such as this).

  • Roger says:

    21 Aug21 August 09:24

    Not unique to BA AmEx! It’s a pretty standard condition with credit cards – always pay the FULL balance to avoid interest.

    I guess if you’ve seen the anticipated credit in your online account, it’s OK to net the balance. But for a £16 credit, potentially costing £40 interest, it hardly seems worth the risk.

    • Ian H says:

      21 Aug21 August 14:20

      Had no idea as it’s never happened to me in 20 years of owning a credit card. They agreed to waive the interest as a gesture of goodwill. Won’t be making that mistake again!!

  • The_Real_A says:

    21 Aug21 August 10:05

    Standard on all cards. You pay interest on the full balance if you do not pay off your statement in FULL.

  • JQ says:

    22 Aug22 August 06:02

    To reiterate the above points, basically refunds don’t count as a “payment” to your account. If the refund goes through before the statement gets generated, then you won’t have to pay it, otherwise you do.

• James Alexander says:

  21 Aug21 August 09:30

  Raising credit rates on Airline sign up cards … All will have been coolly calculated by some overpaid actuary – all proving there’s no such thing as “free”, someone somewhere will pay for this “free” sign up miles. We’ve been duped if we invest in or promote hyper consumerism of such crap.

  • harry says:

    21 Aug21 August 09:37

    Seriously you have no idea what us “overpaid actuaries” actually do, but believe me it’s nothing as stupid as “coolly calculating” how to raise sign up bonuses and interest rates on credit cards. Ordinary finance plebs can do that

    • Sussex Bantam says:

      23 Aug23 August 00:06

      Oi – you leave us ordinary finance plebs alone !

  • Rob says:

    21 Aug21 August 10:03

    This is actually a sign of a well functioning card market. You want low APR? There are cards for that. You want no fee? There are cards for that. You want good rewards? There are cards for that. You want a balance transfer deal? There are cards for that.

    One card can clearly not score on all of these points though.

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