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Why so many problems with my credit card?

Kai had a credit card for some time and had no problems. He had a direct debit set up to pay the outstanding balance each month.

However, at the end of 2022 and into 2023, Kai started to have problems. In November 2022 he was charged interest on his account because his direct debit failed, even though he had enough money in his bank account. Kai contacted his bank and they said the problem did not appear to be from their end. Kai tried to talk to the credit card company about this, but said he had to spend long periods of time on the phone, had to speak with different people, and he never found out what caused the problem. In any event, the company credited the incorrectly charged interest amount, and credited his account with $100 as compensation for the time Kai had to spend on the phone.

The credit card company then offered a promotion allowing customers to make purchases and have a period of 3 months where no payments were required, and no interest would be charged. Kai took advantage of this offer. However, when the company credited his account with the amount for the incorrectly charged interest, and the $100 credit, this paid a portion of the ‘3 month no interest, no payment’ purchases. Also, when the next direct debit payment was made, it paid off the entire balance, including the rest of the ‘3 month no interest, no payment’ purchases. Kai said this shouldn’t have happened.

Lastly, Kai was frustrated that although his direct debit payment on 1 January was paid (a few working days after the New Year statutory holidays), he still received a text a few days after that, saying his account was overdue. In the past he might have ignored the message – being sure his direct debit had just been made. But Kai said that considering the problems he’d encountered so far, this caused him more frustration and to worry that something had gone wrong with the direct debit again.

Although the credit card company had provided the interest credit and the $100 credit, Kai said his complaint wasn’t resolved. The credit card company was unable to resolve the complaint through their internal complaints process, and Kai complained to FSCL.


The credit card company felt that they had already adequately addressed Kai’s complaint by crediting his account with compensation. However, Kai felt like he was continuing to experience problems with his account, and that the company was unable to explain why the problems were occurring.


We talked to the credit card company about why the direct debit had failed in November 2022, causing interest to incorrectly apply. The company said that their IT team was still looking into this, and they said it appeared to only be a problem on Kai’s account.

We checked the terms and conditions for the credit card which explained that whenever there was a credit to the account, the credit would apply to outstanding amounts in a certain priority order. For instance, credits would pay overdue amounts first. The terms and conditions said that ‘3 month no interest, no payment’ amounts would be paid if there was a credit to the account before the end of the 3-month period. However, they’d only be paid if there weren’t other ‘higher priority’ amounts due first. In Kai’s case, there weren’t ‘higher priority’ amounts due, so the credits paid the ‘3 month no interest, no payment’ amounts.

We then explained to Kai that the credit card company was still looking at the problem with the direct debit failure, and this resolved his complaint about that issue. We also explained the priority order of payments under the terms and conditions, and that the credit card company did not have to have a system that stopped ‘3 month no interest, no payment’ amounts from being paid if there was a credit to the account. Kai thanked us for explaining this to him, he had not understood this before. This resolved this part of his complaint.

Lastly, in terms of the text message about the overdue payment, we could understand why this was frustrating for Kai, in the context of his experience in the round. However, this was an automatically generated text, and was something that Kai could feel comfortable ignoring, seeing no further direct debits had failed. We suggested to the credit card company that they could include, in the text, advice that if the person had recently made their payment to ignore the text. Kai accepted this.


Following a telephone call with FSCL, Kai felt he’d been provided the explanations he needed to receive, and his complaint was resolved.

Insights for participants

This case did not need to be investigated by FSCL. It appeared that the credit card company had all the information and tools they needed to have resolved Kai’s complaint within their internal complaints process. All that was needed were some conversations with Kai to dig down into what his complaint was, and then a conversation to provide some explanations about the direct debit failure, and how the credit card worked.