UPDATE – August 2023 – Zable hikes interest rates for some borrowers
Some people have been told that Zable is increasing their interest rate from 38.9% to 48.9%. The customers were told the rate was being increased to reflect changes in Zable’s assessment of their credit record.
48.9% is now the “representative rate” that Zable quotes – this makes it one of the most expensive credit cards.
If Zable or any other credit card increases your interest rate like this, read Increasing the interest on a credit card – your rights which explains you can reject the change and carry on repaying at the previous rate.
UPDATE – August 2022 – Zable brought in changes to correct the problems highlighted in this article
They have told me:
We are making 2 changes to the feature:
- If a customer had no payment due on their last statement or it is their first statement they will not be charged
- If they have paid their statement balance in full by any means by the end of their selected payment date for the card they won’t be charged on their next statement.
This means they will work like a standard credit card, with the exception that the interest-free period you get will be a comparatively short 35 days as Zable typically has a 5 day gap between a statement and the customer’s selected payment date. Most other credit cards have a longer period than 35 days interest-free.
UPDATE – May 2022 – the Level card changed its name to Zable.
In 2022 a reader asked:
I recently got a Level [now Zable] credit card to try to improve my credit score. I have just found out that I am being charged interest from the date of my purchases. I thought this was illegal?
Zable isn’t a credit card I have come across before. While charging interest like this isn’t illegal, it is very unusual so I have had a look at this.
Zable is a “credit builder” card, aimed at people with a poor credit score. It is a brand of Lendable, who give large high-interest loans.
What normally happens with a credit card
Money Helper in A Simple Guide To Credit Cards says:
if you pay off your outstanding balance in full each month, you won’t pay any interest.
Citizens Advice says:
If you pay off the whole amount (the balance) owed on the card by the due date, you will not be charged interest on your purchases.
The Zable card makes this complicated
Zable charges interest from the purchase date unless you set the card up to be repaid in full every month using a Continuous Payment Authority (CPA).
But many people who use credit builder cards have uncertain finances.
They may hope to repay the balance in full and so not be charged interest. That is always the best way to use a credit builder card to improve your score. But they may not feel confident they can do this every month, so they may not want to choose the option to repay in full every month by CPA. Especially as CPAs can be difficult to cancel with your bank.
If they then do pay the statement in full by the due date, they will be charged interest on these purchases. Which they may not expect.
So far as I know, no other credit card does this. If you know of one that does, leave a comment below this article!
Is this clearly explained by Zable?
This isn’t mentioned on the Home page of their website.
Since I originally wrote this article a month ago, the FAQs have been changed to say:
Interest accrues daily against all completed transactions and would stop accruing once the outstanding balance is cleared in full. Any interest accrued in that period is then applied on your statement date.
Please note that we do have a 35 day interest free period for those opting to pay their statement balance in full each month by recurring payment.
To make use of this you would just need to select to pay the ‘statement balance’ in the App and ensure your statement balance is cleared by your repayment date each month or when we attempt to charge the balance on your repayment date.
The “by recurring payment” is a new addition.
This is a minor improvement, but I still don’t think it is good enough. No other cards do this. Many people would not think to read the FAQs as they could reasonably assume they know how a credit card charges interest.
The card T&Cs say:
5.4 How we charge interest
We charge interest on all purchases, cash advances and unpaid interest from the date these transactions are added to your account until they have been repaid in full. Interest is calculated and accrued at the end of each day and is then added to your account once a month on the date we produce your statement. If you pay your statement balance in full by recurring payment on the First Payment Date interest will not be added to your account. If you do not pay your Minimum Payment Amount in full by the payment due date each month we will charge interest on the unpaid part of your interest.
That is clear. But how many people look at the T&Cs in detail?
This needs a Red Hand
Lord Denning, who has been called “probably the greatest English judge of modern times”, said:
“the more unreasonable a clause is, the greater the notice which must be given of it. Some clauses I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient.”
I don’t think it is “clear” or “transparent” to charge interest in an unusual way that no-one would expect.
This should be highlighted on Zable’s home page. No one should have to read the small print or the FAQs to find it out.
And because the Zable card is aimed at people that may have financial problems, Zable should be extra careful with this. In my opinion, if it wants to charge like this, it should explain that other credit cards do not do this.
Makes interest rate comparisons impossible
If you are choosing which credit card to apply for, you could look at a comparison site. Or at the advertising in credit reports such as Clear Score.
Then you will see the representative APRs. Of course you may not get that rate, but all lenders have to say what the APR of their loans or credit cards are is in order to let you make comparisons.
But these comparisons aren’t effective unless the interest calculation method is the same. The way Zable calculates interest means its customers may sometimes pay more interest than they would with a different credit card at the same APR.
Comments on this article are now closed as Zable has brought the card into line with other cards.
Card or catalogue limit too high?
Refunds from Lendable & other loans
Can you get an overdraft refund?
Hector says
Capital one does this: From my statement: « Interest free period: maximum of 56 days on purchases where the balance is paid on time and in full for at least two consecutive months. 0 days for ball transfers and cash »
Samboo says
That isn’t the same thing, Hector. That’s how all (minus Zable apparently) credit cards work with purchases – as long as the balance is paid in full by the due date, no interest is earned on purchases.
The difference with Zable is they require a Continuous Payment Authority (CPA) to be setup to automate the full balance payment – if you were to not have the CPA and simply pay in full and on time by card payment or bank transfer, you’d still be charged purchase interest. You only get the interest-free period by having the CPA.
LevelDown says
I hold a Level card.
I’ve only had an account with them for 2mths and in this time frame I am now on my 4th card.
I paid for petrol using a pay at a pump got a notification for a cash fee of £5.
I contacted CS and they advised that using a pay at pump was the same as withdrawing cash. They agreed to refund as a gesture of goodwill.
30mins later I got a notification saying I’d made a purchase of £48 for Domino’s pizza at a store in Hixon.
I immediately froze the card and contacted CS again who reversed the charge, cancelled the card and issued a new one.
New card came 3days later, and I activated – during the night I got a charge for £120 for a place called Smokestak and then a £43 charge for London Shuffle Club.
Contacted CS again advised I’m in West Midlands and have not used these places. Again, cancelled card and refunded + issue new card.
New card came – activated, two days later charge for £11 from.Ozone Coffee and then £45 at a place called Nightjar.
Contacted CS who again cancelled card and refunded and issued new card.
I’ve checked the location of each of these premises and they are all in walking distance from the Lendable head office.
Little Google search revealed that Im not the only one this has happened to.
I did not activate the 3rd card, it was cut up as soon as I found this out and I’ve also froze my account.
All info has also been passed to the police
Sara (Debt Camel) says
CS I assume is Level Customer Services.
I paid for petrol using a pay at a pump got a notification for a cash fee of £5.
I contacted CS and they advised that using a pay at pump was the same as withdrawing cash.
That sounds unusual!
Level Team says
We can confirm that we do not charge a cash fee for using a petrol pump. We only charge a fee for cash withdrawals from an ATM.
We have been trying to identify your account to find this error but based on the information provided have not been abele to. If you email us at contact@levelcard.co.uk using the email to which your account is registered we are happy to investigate any charge.
Andy s says
Hi
I also had fraud on my account with lendable.
Like you the card was used very close to their office.
I flagged this and got no response.
Reported to action fraud
RJames says
Hmmmm.
I’ve had a Level card for almost a year now. Never had any problems with it. Matter of fact, I prefer it to Cap1 for many reasons.
I read T&C prior to applying and even after I applied. Everything was clear to me and I knew how interest is applied, and I was okay with it. You raised an important point when it comes to comparing interest rates. This is not clear nor helps when comparing different credit cards.
Luckily it doesn’t affect me at all, as I use Level as a credit builder card – small purchases and clearing the balance every statement.
I think this also highlights another important point – people just tick boxes online and don’t bother to read T&C at all!! And then they get outraged and play victim if something doesn’t go their way. If I had a £1 for every time someone laughed at me when I said ‘Yeah, it’s in their T&C.’ and replying ‘Yeah, but who reads that?!’ or ‘Oh dear, did you really read it?! You must have been very bored!!’, I would be rich! And yet, I wouldn’t and I don’t sign anything, unless I have read it first and understood it! Even my recent contract of employment was no exception to that rule :)
I think the title of this article (Level – card to avoid) is detrimental, to say it mildly. Can you put all the blame on Level, their T&C or wording and tell all your readers to avoid the brand altogether, even though you wrote: ‘That is clear. But how many people look at the T&Cs in detail?’.
Sara (Debt Camel) says
It’s good you are using the card correctly – but not many people do this. An important FCA report last year said the FCA should investigate how often people’s credit records do improve, saying:
If these products aren’t found to be effective, the FCA should take steps to limit the use of terms like ‘credit building’.
It isn’t reasonable to bury an unusual clause in the T&Cs. This isn’t fair to the customers.
Out of curiosity, why do you prefer level to Capital One? I would like to know what its plus points are. It looks just like any other credit builder card to me except for the unusal way it charges interest on purchases.
RJames says
There are two main reasons I prefer it to Cap1. I find customer services more responsive in level app (which I also find superior to Cap1). I like the fact that monthly repayment (or any repayment for that matter) is instant, while with Cap1 it can take 3 or more working days.
I have no choice but to use it wisely as I had DRO made against me 3 years ago and that taught me a very valuable lesson when it comes to credit. Seems like this lesson is even more beneficial considering current economic…
Another reason I prefer level is because they increased my credit limit rather swiftly yet in small steps. Though I understand that they obviously have their reasons for doing this hehe and I also am aware what a double-edged sword this can be if you’re not responsible with your credit! But the increases allowed me to be able to rent a car in Europe and cover the hefty deposit. After a year with Cap1 I haven’t had a single increase or an offer to increase.
Overall, I find Level a great ‘post-DRO’ credit card.
Elaine Harrison says
I also read T&C’s and don’t have an issue – I expected to pay some kind of fee or higher interest due to my poor credit rating. If anything it’s a good detterant – I know interest is added so am less likely to spenf on it without careful consideration.
Sara (Debt Camel) says
the point is that NO other credit card charges interest on purchases if you clear the balance at the end of the month, regardless of how you clear it. It is Zable’s insistence that you have to use a continuous payment authority – which many people in a difficult situation will not want to commit to doing, that is unusual and which no one would expect.
Robert Doyle says
I have a Level card and to be honest I really like it. The app is super simple to use, everything was clear when I signed up and I’ve had zero issues with any fraudulent charges. I’ve spoken with level customer support on one occasion regarding making double payments and they were helpful and friendly.
Although I’ve never had to use it yet, they also don’t charge any late fees or Limit fees. The trade off is how they calculate their interest I guess but to me, it’s super clear what you need to do to avoid interest. Even on the app under your account section they say;
APR stands for Annualised Percentage Rate. It
determines the amount of interest you are
charged.
We set your APR based on a number of factors,
including your borrowing and repayment history
with other credit providers.
**the following is in bold***
To avoid being charged interest, your monthly
payment should be set up for statement
balance, and this payment must be successful on
your agreed payment date.
****
This is my first card after bankruptcy and I like it.
Worried says
I’ve applied for this card and I’m hoping that my application is declined after reading leveldown’s comment because they sound like an organised criminal org 😱
Sara (Debt Camel) says
Someone had a bad experience, but I wouldn’t exaggerate. If you don’t want the card, you can just decline it.
Danni says
I didn’t know how to contact them to cancel my application so when they emailed to say that they accept my docs because all four corners weren’t showing I replied to cancel my application and they have been ringing me ever since. I’m not sure how they’re planning to persuade me to continue with my application but they have all the signs of amigo loans and the tactics that they used and they were a complete nightmare to deal with. Never again.
It’s like selling your soul to the devil borrowing money from legal loansharks.
Simon says
Their app is appalling needs to send me a confirmation e-mail every time I try to see my Balance even though every time it requires me to enter and confirm a password, would not be so bad apart from I need to be at work to receive an e-mail then forward it on to my mobile e-mail
Sara (Debt Camel) says
That is unfriendly. Sounds like you need to clear the balance and close this card.
Rob says
They are changing the interest thing now (I got an email about it): –
From 1st October 2022 if you pay your statement balance in full by the end of your First Payment Date, interest will not be added to your account no matter what method of payment you use to pay your statement balance. This means that, provided you pay your statement balance in full by the end of the First Payment Date you will have the benefit of not being charged interest.
Sara (Debt Camel) says
Excellent. Good to see this sneaky practice go.
Sara (Debt Camel) says
I have now updated the article above and am closing comments on it.