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What attracts me most to Internet finance products is the convenience and flexibility. I want to be able to administer changes to my account and complete transactions quickly, conveniently and wherever possible, without having to contact the bank concerned. The other key attraction should be that there is an opportunity to save money – it’s cheaper for the bank, so it should be cheaper for me. The first Internet product to which I subscribed was a Cahoot credit card, several years ago. This is a summary of my thoughts and experiences over that time.
I was attracted to Cahoot because the company was set up as an affiliate of the Abbey National group. Whilst the Abbey National is not necessarily the most competitive bank on the high street, I have always received good service from them and as a first stab at Internet banking, I was inclined to go with a name that was familiar to me. When the card was originally conceived, there were also a number of different interest and fee options, according to how you wanted to manage your account. I was within the first 20,000 applicants and as such received the card with 0% APR and no fees for 9 months. These options still exist for cardholders today.
BASIC TERMS AND CONDITIONS
The Cahoot credit card is different from other card service providers, in that you are offered three different account options.
Option 1 – Interest Only
This option is targeted at users who seldom carry a balance because there is no monthly fee, and if you do carry a balance, then you will be charged a lower APR (currently from 7.0%).
Option 2 – Interest and Fee
This option is targeted at users who frequently carry a balance on their card. There is a small monthly fee (from £6.83 per month) and a discounted APR that starts from 6.3%.
Option 3 – Fee Only
This option is targeted at users who always carry a high balance on their card. There is only a monthly fee to pay – no interest. The fee is based on your credit limit and represents an APR from as low as 5.6%.
In reality, these options are not as exciting as they first appear, because the fees charged are really a different way of showing your interest. Even in option 3, where you pay no interest at all, the fee charged monthly goes up and down in line with the balance you carry – so it is an interest payment by another name.
In terms of value for money, however, all these options are very competitive and easily match the standard APR offered by the nearest equivalent – Egg – which currently stands at 12.9%.
In order to reduce costs, and to therefore protect customer savings, the account management process is therefore facilitated exclusively online. The application process takes place online – relatively straight forward and timely – but the credit agreement must still be sent and returned by conventional mail, so the time taken to receive your new card(s) can still be quite lengthy. One of the problems that Cahoot has always suffered from is an inability offer a truly dedicated online service – but I’ll talk more about this later.
One important fact to note – Cahoot products are only offered to those people who are 21 or over – the normal age restriction on a credit card application is 18 years.
ACCESSING YOUR ACCOUNT DETAILS
The Cahoot web site is not the most logically arranged web site. When viewed in Internet Explorer, the screen display is adjusted slightly to the left, with a large blank strip running down the right-hand side. There is a scroll bar on the right, but I can’t help thinking that the page looks clumsy. The page then links to each of the main products offered, with a large picture of the advertised 8% typical APR. There are various account management options in a menu bar at the top, although, rather confusingly, there is also a scroll down menu, which offers nearly the same options all over again.
Logging into the site, in order to manage your account is refreshingly simple, whilst still being secure. You are prompted for a user name (selected on application) as well as a password, and then a number of memorable options (place, year, maiden name), one of which is presented at random during each login. I find the Cahoot site much easier and faster to log into, compared to Egg, for which a lot more information is prompted. Once you are logged in, you are presented with a personal homepage, which displays any of the Cahoot products that you may have taken up.
MANAGING YOUR CREDIT CARD ACCOUNT ONLINE
In general, I think that the Egg web site enables far easier management of your credit card account online, but the Cahoot site is more sophisticated. A useful feature is the Cahoot Messenger service. This shows messages received from Cahoot, an alert for which you can opt to receive via SMS and/or email. The messages received vary and include essential account information as well as advertisements – but at least they prevent junk mail at home. From your personal home page, you can select your credit card account from one of two menus, and then you will be presented with detailed account information.
From the Account Status page, you can view all the sorts of detail that would appear on the front page of a printed statement. The problem is that the page is not formatted in a particularly logical way, and unlike a paper statement, things like your minimum payment and payment due date are not instantly obvious. A useful function is a pre-formatted printable account summary – although only the traditionalists would really want to keep a printed copy.
A detailed Statement is, of course available, showing all your payments and transactions. I was surprised to find that Cahoot stores two years’ worth of statements are available online – this is considerably more than Barclaycard. To be fair, the statement does present the information in a more logical format than the Account Status – but everything is still adjusted to the left of the screen.
From the Account Manager, you can carry out a number of functions. This is easily the most important part of the online process, because you need to access this section in order to:
Activate your card or order a replacement Change you card PIN Make payments and adjust your direct debit payments Change your credit limit Close your account
Each of the available functions is listed, with a hyperlink to another screen that will facilitate your request. It’s worth noting that transactions can take some time to process, according to what they are. A change to your direct debit payment, for instance, must be made a certain amount of time before the payment is due to be taken.
The site offers a large number of frequently answered questions, but if you still need help, then Cahoot prefer that you send your query via email. Sadly, the email route is not an option that I am particularly in favour of, purely because you don’t receive an acknowledgement and I have waited for several days for a response, before now. My preferred method of account is still via the telephone and fortunately a help line is advertised, albeit with a national rate number.
Emails sent from Cahoot generally confuse me – they will tell me that a statement is ready and then I will visit the site and it won’t be. I’ve queried this a number of times, and to date, have never received a response.
WHY CAHOOT GETS IT WRONG
The primary reason that the Cahoot credit card account falls down is that the online management process simply isn’t complete. For example, you can change the amount of your direct debit payment, but you can’t change your bank account details or the date of your payment. To do this, you must request a paper direct debit mandate, which then needs to be completed and mailed back to the company.
Another major problem for me is the way in which payments and interest are charged. I don’t normally carry a balance, but for a couple of months last year I became very confused by the payment calculations.
My statement is generated on the 15th of each month. My payment is debited from my bank account on the 30th of the month. If I want to change the payment due on the 30th of a month, I must request the change 3 working days before the 15th, when the statement is calculated. This means that I must choose my payment amount BEFORE I know how much interest has been charged.
Confused? I was – and quickly cleared the balance to avoid any further confusion.
It’s also worth noting that once you have selected one of the three account management types, if you subsequently change your mind, you can’t change over. So, if you have the interest only option, you can’t switch to the fee only option and so on. I just don’t find the Cahoot system flexible enough.
I have no complaints with the value for money here – Cahoot is definitely one of the more competitive providers out there. The account management process leaves a lot to be desired though – and the whole system is very staid. There are no special offers, loyalty schemes or affiliates to keep you interested. My Barclaycard account offers me a lot more flexibility – which is why my Cahoot account remains unused.