Creation cancelling credit cards which have been used with a Curve Card

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Creation Financial Services, issuers of the IHG Rewards and (closed to new customers) Marriott Visa credit cards, made a very aggressive move on Friday in its dispute with Curve Card.

It appears that the majority of credit cards which had been used with a Curve Card are being closed.

One call centre agent said that 1,800 cardholders were impacted. We cannot confirm this number.

Creation closing IHG and Marriott credit cards used by Curve Card holders

The closure letter states that cards are being closed on 3rd December.

Based on reader discussions with the call centre, but not confirmed in writing by Creation:

annual free night vouchers on the IHG Rewards Premium credit card will still be desposited if the cardholder spends £10,000 before their card is closed

there will NOT be a pro-rata refund of the £99 annual fee on the IHG Rewards Premium credit card – although you would be free to dispute this with the Ombudsman

If you cannot trigger your free night voucher by 3rd December but would otherwise, you arguably have a case for a full refund of your IHG Rewards Premium £99 fee for the current year.

Why is Creation banning Curve Card holders?

It isn’t entirely clear what is driving this, although I was told by an independent industry consultant that it was being pushed by National Savings.

Curve Card, for those who don’t have one, is a debit card which allows you to recharge transactions to a linked credit card. You can learn more about Curve Card in this article.

This meant – most specifically – you could deposit money into National Savings and have it charged to a miles or points earning credit card as a purchase. Most Curve Card holders had a £9,000 daily limit albeit capped at £1.8 million per year.

Whilst Curve Card had always had blocks in place for payments to banks, there were certain grey areas such as National Savings, HMRC and various investment firms such as Hargreaves Lansdown.

Creation had initially sent out text message to cardholders a few weeks ago saying that its cards could no longer be used with Curve Card. I was told at that time that mass account closures would follow, and here we are.

One problem is that the ban is catching many people who used Curve Card purely for Apple Pay functionality. It was the only way to add your Creation card to Apple Pay.

For clarity …. the free IHG Rewards credit card is still open to new applicants. Creation is not pulling out of the UK and is only closing these 1,800 (TBC) accounts.

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Category

IHG Rewards

This article is closed to new posts. Discussion continues in the HfP Forums.

Anna says:

2 Oct2 October 11:02

What’s excluded from qualifying for the Virgin card sign up bonus £3k spend? Would car finance payments count? Ovo energy top up? Gift cards/amazon top up? I’ve also got an Amex sign up bonus to chase so don’t want to divert too much spend away from that.
- BuildBackBetter says:
  
  2 Oct2 October 11:07
  
  In same situation. I guess start with payments that don’t accept Amex and split the rest between the cards.
- Reney says:
  
  2 Oct2 October 13:10
  
  I would be really surprise if giftcards and amazon top ups don’t count!
  - CarpalTravel says:
    
    2 Oct2 October 20:24
    
    Just buy the Amazon (or other) gift cards from a supermarket. They definitely will count.
Graham Walsh says:

2 Oct2 October 11:03

Couldn’t they have written a nicely worded letter. Or did they give the job to someone on unpaid work experience?
- BuildBackBetter says:
  
  2 Oct2 October 11:54
  
  A nice letter would require some effort…
  - Fur Fox Ache says:
    
    2 Oct2 October 13:20
    
    Just got mine today. It is rude isn’t it. Understand some of the previous comments now!
- Sussex bantam says:
  
  2 Oct2 October 13:57
  
  Yes to this ! I actually don’t mind them closing my account (swings and roundabouts and all that) but I am quite annoyed that they turned off curve with a text message and closes the account with such a terse letter !
- johnny_c-l says:
  
  2 Oct2 October 14:02
  
  I thought it was a perfectly written letter, concise, clear and to the point on what is happening.
  
  I’d much rather this than a waffely letter full of marketing speak.
jjh4yb says:

2 Oct2 October 11:05

I’ve never had a card issued by Creation, but I recently received an email from Curve with the subject line “Suspected breach of our card terms” warning me about my activities with NS&I. I queried this, as I’d been using the Curve card to buy Premium bonds and my use didn’t seem relevant to the detail in the email.

I got a very strong response from Curve and now they want proof of income, savings, bank statements and credit card statements. Failure to provide all this detail will result in my Curve account being closed. OK, perhaps I should have just accepted the warning, but I was trying to do the right thing.

I have found that over the few years I have held a Curve card, the main uses have gradually been blocked. As a result I am thinking just to let my Curve account close.
- simonbr says:
  
  2 Oct2 October 11:29
  
  Exactly the same happened to me. Does anyone know if Curve will do a pro-rata refund on the annual metal card fee, if they close the account?
  - Blenz101 says:
    
    2 Oct2 October 12:15
    
    Nothing in their terms to suggest they will. If you comply with the request and haven’t breached their terms you have nothing to worry about.
- John says:
  
  2 Oct2 October 11:38
  
  If you had read one day out of the last 10 days’ chat threads you would have known to do nothing.
- BuildBackBetter says:
  
  2 Oct2 October 21:42
  
  First rule of fight club is…
Craig says:

2 Oct2 October 12:00

No letter yesterday or today for myself or player 2, both have black IHG cards. Dare we believe?
- Reney says:
  
  2 Oct2 October 13:13
  
  how efficient is royal mail in your area? Do you have a curve card?
  - Craig says:
    
    2 Oct2 October 13:21
    
    Had deliveries yesterday and today, yes do have Curve.
- jj says:
  
  2 Oct2 October 13:45
  
  Nothing for me on the black card, either. I have used it with Curv, too.
Roger S says:

2 Oct2 October 12:02

I’m abroad at the moment but expect I’m one of those that will receive the letter cancelling my Marriott card that previously I had directed all expenditure (except direct on Marriott ) to via Curve (no MS).
Does anyone know what Chase are planning in the UK? They have excellent sign up bonuses for both Bonvoy and Avios in the USA!!
John says:

2 Oct2 October 12:09

No letter today either, post has been reliable, been receiving ebay purchases (via RM) next day
Paul says:

2 Oct2 October 12:35

I have both a creation credit card (creation everyday) and IHG free. Both my cards are being cancelled. Therefore can’t simply be and end to IHG relationship, however if you click to apply for the card currently you get a page saying technical difficulties.
- Jason Davies says:
  
  2 Oct2 October 15:40
  
  Just received the letter today, I have an IHG Premium Credit Card, and to be honest I’m going to ring them Monday and demand the fee back or I will take them to the ombudsman
Adam says:

2 Oct2 October 12:43

A noobie question:

How does MS affect Creation or any other company’s bottom line. As they earn revenue for each transaction that takes place; unless there reward business model is somehow flawed?

As I understand the the biggest losers would be the company accepting payment and Curve rather than anyone else, as they would be bearing transaction costs.

What am I missing???
- Disappointed says:
  
  2 Oct2 October 13:05
  
  Many reasons from money laundering to making most money from interest which is not the case in MS.
- Blenz101 says:
  
  2 Oct2 October 13:06
  
  They make their money from interest, fees charged to cardholders, and interchange fees. From the money they make they buy points at wholesale rates to incentivise the use of their card.
  
  As a minimum Curve cuts them off from cash advance fees and associated interest and forex fees.
  
  The risk profile of a customer who is using Curve to fill up a savings account is also very different. As they aren’t making a genuine retail purchase they will just use the cash they have printed to pay down the card meaning they are not going to pay interest. Some were even using a credit card to pay off their credit.
  
  Taken as a whole these are not desirable customers and as a result they have been given 60 days notice and are having their accounts closed.
  - WillPS says:
    
    2 Oct2 October 13:13
    
    Curve doesn’t cut them off from cash advance fees. They pass the MCC straight through and there is nothing to stop card providers charging a cash advance fee if their terms feature one.
    
    This is what happens when you try and withdraw cash on an RBS or Tesco credit card with Curve.
    
    If their beef is losing forex then they should also be looking at PayPal.
    - Blenz101 says:
      
      2 Oct2 October 13:40
      
      But you know that these fees were not being charged with the notable exception you have pointed out as they were not being detected as ATM withdrawals, just as NS&I fell into the grey area of government services.
      
      They could have potentially invested in their systems to catch particular transaction type but instead have blocked the use altogether and booted out those they suspect of gaming the system.
      
      Fee free ATM withdrawals abroad, same issue.
      
      Unfortunate for those who just wanted Apple Pay but they are collateral.
      - Roy says:
        
        2 Oct2 October 16:35
        
        Don’t forget those of us who just wanted Google Pay!
  - NFH says:
    
    2 Oct2 October 13:14
    
    Creation is closing not only accounts of those with high volumes of transactions with MS-related MCCs, but also accounts of anyone who has used Curve innocently, for example as a result of Creation’s failure to implement Apple Pay and Google Pay.
  - Adam says:
    
    2 Oct2 October 13:54
    
    But if a genuine customer does large transactions and pays off on time and hence no interest charges — how is it any different?
    
    In both cases revenue would be identical for the company I.e. membership fess if any and interbank charges
    
    MS seems to be more secure as there is small probability of default and money will come back swiftly, should be encouraged rather 🤣
    - Blenz101 says:
      
      2 Oct2 October 14:18
      
      Think of it like your high street bank. You get to bank for free because other customers are paying interest and charges.
      
      1,800 people have been shown the door as they are undesirable as customers and as a whole they skewed the profitability of the customer base.
    - CJ says:
      
      2 Oct2 October 14:23
      
      They lose money on transactions, because the cost of reward points is greater than the interchange fee they receive. They offer the reward points because they expect x% of genuine spending will be rolled over into an interest-bearing balance, y% of genuine spending will be in foreign currencies with a fee, z% of genuine customers will do a balance transfer, etc. all of which are profitable for them.
      
      They were clearly too optimistic in their assumptions for the black card, even with an annual fee, so it was withdrawn from sale some time ago.
      
      If more people start cycling huge amounts through their card with none of the profitable activities, it should be easy to see why they’re not happy.
      - Rui N. says:
        
        2 Oct2 October 15:41
        
        “They lose money on transactions, because the cost of reward points is greater than the interchange fee they receive”
        
        How do you know that? And if that’s the case, how come they keep these cards open? They like to lose money?
      - Rob says:
        
        2 Oct2 October 17:20
        
        It’s obvious beyond belief. Creation will be paying the 0.4p that is the bottom line price IHG sells points at to the public, so 0.8p on the Premium card. Retailer fee is capped at 0.3% by law, so there is a 0.5% loss on every £1 you spend. (There are other fees paid by retailers but lets ignore those for simplicity.)
        
        Your £99 annual fee effectively covers the ‘loss’ on £20,000 of annual spend. This is far more than the average person will put through, so it averages out – until you start doing £9,000 per day via Curve.
      - Rui N. says:
        
        2 Oct2 October 19:43
        
        I’m sorry Rob, but are you saying that Creation launched a card where they were in such a weak negotiating position, that the deal they got is to pay the same for points that the general public pays?! That is quite beyond belief indeed.
        I, like a lot of people here, don’t have the black card. The white card pre-Curve was used just as a back up when Amex is not accepted, so the £99 fee of the black card was not justified as it would be impossible to get the free night (my non-amex spend is <£500 per month, and that's because I buy giftcards for supermarkets, etc. at perkbox which accepts amex for less and less stuff every day, otherwise it would be <£200).
      - Roy says:
        
        2 Oct2 October 21:54
        
        Seems surprising that the hotels aren’t able/willing to discount the points they sell to the credit card issuers. Essentially it’s advertising that the hotel group is buying, by having the hotel brand in front of the customer every time they spend.
      - Rob says:
        
        3 Oct3 October 09:12
        
        You would be shocked at what companies pay for points. I know Avios partners who have to pay more per point than you would pay yourself when a bonus was running. Even the Amex deal for Avios is surprisingly high, apparently.
- Doug M says:
  
  2 Oct2 October 13:12
  
  I don’t understand how the CC providers took so long to get here, Amex were all over it almost immediately. Creation and others must have seen this happening month after month and did nothing. Many many people took about two minutes to work out how Curve was useful, yet Creation didn’t?
  - NFH says:
    
    2 Oct2 October 13:17
    
    Amex terminated its contractual relationship with Curve for different reasons. One was that Curve allowed merchants to accept Amex without contracting directly with Amex, and Amex didn’t want to lose control over that. It also diminished Amex’s brand presence. None of that applies to Creation’s reasons. Creation doesn’t even have a contractual relationship with Curve, so it’s totally different.
    - Nigerian Prince says:
      
      2 Oct2 October 13:54
      
      I suspect there must be a clause allowing visa/mastercard issuer to block indivisual merchants, a lot of credit cards block a lot of merchants (adult, betting, financial institutions), this is fairly standard thing
      - Roy says:
        
        2 Oct2 October 21:58
        
        Most of the examples you give would probably be handled by blocking based on MCC. But many credit cards block cryptocurrency purchases, I suspect by blocking specific merchants – since I don’t think cryptocurrency purchases have their own MCC (yet) – so there is a precedent, or sorts.
      - David says:
        
        3 Oct3 October 10:29
        
        Big difference between a category block at MCC level and a specific merchant.
        
        Also some of the block types you mention are for other reasons e.g. no gambling on credit and/or money laundering concerns.
        
        From experience on the issuer side I can tell you it is a lot of work sometimes justifying why you want to do something to the card schemes (Visa/MC) and they need to ensure a level playing field.
  - BuildBackBetter says:
    
    2 Oct2 October 13:47
    
    It’s a French bank. They take time.
    - Harrier25 says:
      
      2 Oct2 October 13:51
      
      Getting their own back for not allowing them to take all the fish from our waters. Stroppy French!
    - Dave says:
      
      2 Oct2 October 16:16
      
      The “cheese-eating surrender monkeys” calling it quits! Shocker 🤣
  - Andrew says:
    
    2 Oct2 October 13:58
    
    Because some of the CC providers are running on shoestring IT platforms that they haven’t been upgraded properly for years.
    
    They probably haven’t been able to get the relevant data off their systems to audit.
    
    Maybe they didn’t even need to until the Lockdown happened, people stopped travelling and suddenly started spending less on their credit cards and repaying more. The MS had previously been background noise in the scheme of things, now it’s noisy and very much in the foreground.