Curve Card made a slightly confusing announcement on Friday, emailing members to tell them that it was imposing a 1.5% fee on anyone who used their card to pay off a credit card.
The reason it was confusing is that paying credit cards using Curve Card is against its terms and conditions. It represented financial recycling. Because Curve Card recharges your payment to whatever Visa or Mastercard you link to it, you were effectively paying off a credit card with another credit card to earn points. This was not allowed.
Curve Card had already blocked some financial institutions from its system. American Express seemed to come and go – a lot of people found that they could pay off their American Express bills using Curve and earn points on whatever underlying credit card was linked to it. Personally I never got this to work, but I have a ‘first generation’ Curve Card which is structured slightly differently.
Which merchants will Curve Card now charge you 1.5% to pay?
Curve Card has now categorised two types of payments which will incur a 1.5% fee. These are known as ‘Curve Fronted’ transactions and are explained on the Curve website site.
The fees are triggered by the coding applied by the merchant. This may lead to anomalies as some merchants are incorrectly coded, or have a code which represents a different part of their business to the part you are transacting with.
The following payments use Merchant Category Code 9399 and are now charged at 1.5%:
- HMRC (this change was made a few months ago)
- National Savings & Investments, including Premium Bonds
- DVLA Vehicle Tax
- Student Loan Payments
Until yesterday, all of the above – except for HMRC – were payable with Curve Card for free and could be recharged to a credit card which earned points.
IMPORTANT: As of Saturday night, feedback in our comments was that Curve Card had not yet activated the 9399 code except for HMRC. If you try to buy Premium Bonds and don’t see the message about a fee, it will go through OK. This doesn’t mean that your underlying credit card will not charge you a ‘cash advance fee’ however.
The following payments use Merchant Category Code 6012 and are now charged at 1.5%:
- Paying credit card bills, loans or mortgages, where your Curve Card recharges to a credit card
- Purchasing financial services or products from banks, Credit Unions, Deposit Takers
- Purchasing foreign or non-fiat currency such as cryptocurrency, travelers cheques or money orders
- Purchasing store value cards such as prepaid cards
In reality, most of the above were already blocked by Curve Card on an ad-hoc basis and were against its terms and conditions in any event.
Barclaycard is known to block payments with Curve Card and this policy is unlikely to change. Other credit card companies may move to block Curve Card payments to discourage financial recycling even if Curve itself is happy to allow it.
Can you get around this fee?
If you have Curve Metal (£15 per month), you are exempt from these charges.
This means you can now, openly, pay off your credit card with another (or even the same!) Visa or Mastercard credit card linked to Curve as long as you pay £15 per month for Curve Metal.
Does this makes sense?
It depends. For a start, some underlying credit cards will – irrespective of whether Curve imposes its 1.5% fee – treat these payments as a cash advance. This means that you wouldn’t earn points and, worse, would be hit with a 3% cash advance fee. Barclaycard is also known to block Curve Card payments and others may follow suit (MBNA is fine, Amex is usually fine). The only way to be sure if a payment will work is to test.
Secondly, you are limited by your Curve Card limits. Most people start at £50,000 per year, with daily and monthly limits on top. If you’re lucky you may get moved up to £100,000 per year. Even if you are a high spender, you will still bump up against the cap on your total Curve Card spending.
In some scenarios it would work. If you could recharge £50,000 of credit card repayments to your Virgin Atlantic Reward+ Mastercard, which earns 1.5 miles per £1 spent, you’d be picking up 75,000 additional Flying Club miles per year.
In this scenario, the £15 per month cost of Curve Metal would make sense. However, it would depend on Virgin Money deciding not to treat your Curve Card transactions to financial services businesses as cash withdrawals, or deciding to block Curve Card payments entirely.
Is it still worth getting a Curve Card?
It has some value, yes.
For a start, you can still recharge any purchase which is ‘debit card only’ to an underlying Visa or Mastercard credit card and so earn points.
As long as the purchase doesn’t fall into the categories listed above, you’re fine.
You can also make free ATM withdrawals and have them recharged to your credit card, treated as a miles-earning purchase. There is a monthly cap which varies depending on which Curve Card you have.
Curve Card will pay you £5 to try it …..
….. so there is no risk.
To sign up to Curve, simply go to this page of their website or download the app. The easiest thing to do is order the free Blue card and then upgrade to Black or Metal once you have got familiar with it, although you can start immediately on Black or Metal if you want.
Curve will pay you £5 for trying it out if you use my referral code of OQB4J – a £5 cash credit will be added to your Curve Rewards balance. If you click through via the link above (or here) and then download the app it should track automatically. Alternatively include the code when you add your personal details to the app.
Our introductory guide to Curve Card is here if you are a new HFP reader.
Want to earn more points from credit cards? – January 2021 update
If you are looking to apply for a new credit or charge card, here are our January 2021 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.