[ska1]

I have purchased a car service plan for my new car. It is for 2 years and I paid for the full amount on my Tesco Mastercard. I was very surprised to have been charged a Cash Transaction Fee by Tesco Mastercard, there was no indication that this would be the case. I looked on the Tesco Bank website and it doesn't look like my purchase should incur a fee as it isn't a 'cash like' transaction. I called Tesco M'card and they said I had been charged because a Car Service Plan is a financial product like Insurance. They said if I purchased insurance via a credit card I would also be charged a fee. I recently paid for my Health Insurance via Tesco Mastercard and didn't incur a fee. I have also paid for a Car Service Plan on my Amex Card for my other car and have also not been charged a fee. Before I go through all the steps of getting the Service Plan cancelled and then recharged on my Amex card, I'd appreciate any inputs from anyone that has come across this before. Thank you.

[ska1]

@ska1
In case it helps other people with a similar problem, I thought I'd add below the (eventually) positive outcome of my query.

I sent a private message Tesco-Bank and they replied as follows:

"When you make a cash transaction, we charge a fee of 3.99% and interest at your standard cash transaction rate. This is from the date of the transaction until the date this cash balance is paid.

We consider the following types of payments to be cash transactions: wire/international money transfers, repaying borrowing, purchasing non-Sterling currency outside of Tesco, payments to prepaid or virtual cards, purchasing gift cards, investments and share trading. Have you made any of those types of payments?

When a transaction is made, the retailer assigns a Merchant Category Code (MCC). This is a four digit sequence that confirms the type of transaction made, which is passed to us by the retailer. If an MCC is applied identifying a transaction as cash, it will incur a cash handing fee and interest would be applied. If you feel the incorrect MCC has been applied, it would best giving our Credit Card team a quick call on 0345 300 4278 (Mon - Fri: 8am to 9pm, Sat - Sun: 8am - 6pm) and one of my colleagues will be able to look into this for you. To speak to one of my colleagues, please choose option 2 and enter your security details, then press 0."

My purchase was simply for the servicing of my car for 2 years, in the UK, and was paid in advance because it was cheaper that way. It didn't fit in any of the categories listed, not even vaguely. I therefore called the helpline re the MCC code.

The lady was very helpful and said it wasn't to do with the MCC code. It was simply that I had made a purchase with a company that deals with financial services. It doesn't matter what the purchase is for, what matters is the type of company the transaction is with.

My service plan is for an Audi purchased from my local dealership. The transaction for the service plan went to a company called Volkswagen Financial Services (nothing to do with the dealership, they are apparently an agent) and the purchase had nothing to do with financial services either - I bought a service plan up front, not via a loan or financing other than the use of the Tesco Mastercard. This would be no different to purchasing an extended warranty on your freezer or washer so beware.

As you can't tell that you will incur a Cash Transaction fee in advance of your purchase I really don't know how you can avoid them eg how can you know a company is classed as 'financial services' as it may not be obvious from their name, especially if the company you are dealing with turns out to be an agent on their behalf?

However, you can get the charge refunded as is the case with me (thank goodness). But it is a lot of hassle and an unnecessary stress and Tesco Bank could certainly include "any financial services company" in their list of criteria.