I received a letter from American Express yesterday promoting its “Express Cash Facility”; effectively trying to pump me to withdraw cash from an ATM on a credit card. That’s bad enough in itself, but nowhere on the letter did it tell me it’d charge 27.9% interest for the privilege…
For years we’ve had more and more responsible lending regulations, so this type of literature really is beyond the pale. The letter says:
“From time to time, whether you are at home or abroad, you may need to use your card to withdraw cash from an ATM. This service is available for you to use, and one of the many benefits that comes with the card.”
It then goes on to tell me that I can withdraw up to £200 a week using my PIN, and that I won’t earn cashback (I only have the card because it’s the current top cashback card).
What the letter doesn’t say
Nowhere, even in the small print does it tell me the following:
- Interest Rate.
The cash withdrawal rate is a huge 27.9% interest – far higher than the standard APR of 19.9%.
- You pay interest even if you repay in full.
The summary box is also missing this crucial nugget of info:
“We will not charge any interest on any Transaction, other than a Cash Advance or a Balance Transfer, if the whole amount you owe on the Account is paid to us in full and on time each month.”
In other words even if you clear the card at the end of the month you’ll pay interest on cash withdrawals.
I thought this type of nasty, profiteering marketing and obfuscation was consigned to dustbin of history. I am going to check whether this breaks any regulations and report it if it does, yet my worry is the regs only apply when companies are marketing to new customers.