SUNDAY EDIT: On Sunday evening, Curve put details of these changes back on its website, with two changes:
for new cardholders from Monday 25th November, these new policies apply immediately. Existing cardholders will not switch to the new rules until 24th January (not 21st as originally stated)
the new policy will only apply to ‘we don’t accept credit cards’ merchants specifically listed by Curve, and initially only HMRC will be on that list. You will NOT be surcharged for using Curve at any other merchant which only accepts debit cards.
MONDAY 6pm EDIT: Curve has added some additional exclusions to the website:
After an initial trial period with HMRC, other government payments such as National Savings & Investments, DVLA Vehicle Tax, and Student Loan Payments will be included as well.
Back to the original article ….
Curve Card briefly added a section to its website yesterday about new fees it is introducing for debit card payments which are recharged to a credit card.
The information disappeared from the website after pushback in Curve’s community forum, but it was detailed enough to assume that it is happening.
The main target here is HMRC tax payments. It will also apply wherever you use Curve Card to make a debit card payment – at a merchant which does not accept credit cards – which you recharge to a credit card.
I’m not sure that many people have huge amounts of debit card payments apart from HMRC. Most (not all) credit card companies are blocked by Curve using its get-out of ‘no financial services transactions’. I think all debit card payments to mortgages, pensions or savings accounts are already blocked.
(If you don’t know anything about Curve Card, you may want to read my introduction here before continuing.)
Why do people use Curve Card to pay HMRC?
HMRC stopped accepting credit cards for tax payments last year, after the Government stopped merchants imposing fees for credit card use.
This was a serious blow for miles and points collectors who were not on PAYE, as it removed the ability to earn substantial sums of miles from paying VAT, NI, income tax etc.
Curve Card offered a way around this. You could link a points-earning Mastercard or Visa credit card to your Curve Card and use it to pay HMRC. Curve Card is treated as a debit card so it is accepted.
This was, essentially, free miles for people like myself. I have used the bulk of my £50,000 Curve Card limit this year paying HMRC bills. I recharged them to my Miles & More Global Traveller card, earning close to (50,000 x 1.25) 62,500 Lufthansa Miles & More miles for free.
It looks like this is coming to an end ….
This is what was posted on the Curve Card website for a period yesterday:
Can I use Curve to make payments to HMRC?
If you decide to use the Curve card with a credit card selected as your payment card, starting on the 21st of January 2020, you may be charged a fee. For Curve Blue (free) and Curve Black (including Curve Black Legacy users) customers you will be charged 1.5% of the amount of the transaction. There is no charge to Curve Metal customers.
Here is the full list of Q&A uploaded to and then removed from the site:
For which transactions will the Debit Fronted Credit fees apply?
Can I use Curve to make payments to HMRC?
Does Curve charge a fee to make payments to HMRC?
Are there spending limits to HMRC payments?
I got a decline after making a payment to HMRC. What happened?
It is pointless (sic) paying a 1.5% fee to pay HMRC via Curve Card. There are very few scenarios where the underlying miles and points earned will be worth that.
Your miles would be costing you 1p and 1.2p respectively. This is not a great deal but some people may find it acceptable. I don’t.
It is worth noting that Curve Metal customers will not pay a fee. This is intriguing. Curve Metal costs £14.95 per month or £150 per year. If you have substantial tax bills, the upgrade may be attractive.
Let’s run some numbers …..
GREAT DEAL – Pay £50k of tax on a Miles & More Mastercard (1.25 miles per £1) = 62,500 Miles & More miles for £150 Curve Metal fee
GREAT DEAL – Pay £40k of tax on a Virgin Atlantic Reward+ Mastercard (1.5 miles per £1) = 60,000 Virgin Flying Club miles for £150 Curve Metal fee
AVERAGE DEAL – Pay £30k of tax on an IHG Rewards Club Premium Mastercard (2 points per £1) = 60,000 status-qualifying IHG Rewards Club points (valued by me at £240) for £150 Curve Metal fee
BAD DEAL – Pay £20k of tax on a HSBC Premier Mastercard (0.5 Avios or other miles per £1) = 10,000 Avios for £150 Curve Metal fee
The bottom line is that:
if you pay enough to HMRC each year, and
you have a generous-enough points-earning Visa or Mastercard credit card linked to Curve
…. then Curve Card via Curve Metal is still an attractive way to pay the Inland Revenue or any other debit card bill which accepts Curve.
Don’t forget that Curve Metal has other benefits too
On top of the ability to pay unlimited sums to HMRC – subject to your Curve Card limits, which for most people are £50,000 of charges per year – your £150 annual Curve Metal fee comes with other benefits:
This page of the Curve website compares the three different types of Curve Card. With regards to Curve Metal:
Card: You get a funky 18g brushed metal card in red, blue or rose gold. I have been trialling the blue one and it is a bit boring to be honest so I’d recommend one of the others!
Foreign exchange fees: Unlimited transactions with no fee (0.5% fee $ or € and 1.5% fee for other currencies applies to transactions made on a Saturday or Sunday)
ATM withdrawals: Overseas: £600 per 30-day period for free, 2% thereafter / UK: £200 per 30-day period fair use cap
These are the key benefits. There are other benefits which I do not value highly but which some readers may find useful:
Travel insurance underwritten by AXA (this looks OK – you can see the policy document here as a PDF – and with an age limit of 70, although the rules are stricter than many policies in terms of, for example, sports you may not play on holiday)
Gadget insurance (maximum value £800 with a £50 excess)
Car rental CDW waiver coverage (I have this via Amex Platinum but if you do hire cars and don’t have a standalone policy this will be worth something to you – the car must be worth under £25,000 however)
Airport lounge access via LoungeKey (this is NOT free access, you will need to pay a fee of £20 per visit)
1% cashback from six premium retailers. This is on top of the rewards you will earn from your underlying card.
You won’t necessarily get £150 of annual benefit from this package, but you will get something. And, of course, you will be retaining the ability to make substantial payments to HMRC via Curve Card.
Final thoughts …..
There had been rumours that Curve Card was introducing fees for paying the Inland Revenue after it sent out a questionnaire recently seeking views on the topic.
What is new here is the addition of charges for ALL debit card payments made with a Curve Card which are recharged to a credit card.
If the structure above turns out to be correct then many of our SME readers will still be OK. They will have £50,000-worth of HMRC charges per year across VAT, PAYE, income tax etc and the upgrade to Curve Metal can be justified if you have a generous Visa or Mastercard credit card linked.
The losers are likely to be those with under £10,000 or so of HMRC or other non-financial debit card payments. If this is you, it won’t be worth paying £150 per year for Curve Metal and it won’t be worth paying a 1.5% fee to use Curve Blue or Curve Black.
Let’s see if anything changes between now and the proposed launch date of 21st January.
If you have read this article without knowing anything at all about Curve Card, read my introductory article here. As it explains, Curve Card is free at the basic level and Curve will actually pay you £5 for trying it out if you use my refer-a-friend code.
(Want to earn more miles and points from credit cards? Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)