There is the cross-subsidy from credit card interest, however, and John Lewis may have even provided the vouchers “for free” to HSBC as part of a subsidy to encourage their cardholders to spend more at JL and Waitrose.
My point is, I highly doubt HSBC actually ran the card at a loss - it would probably have been a modest overall profit.
You are looking at one piece of the pie. They also get interest on balances, fees on balance transfers, more spend driven to them as a result of the card. Multivariabled equations seem simple if you don’t look at the majority of the variables !
Received an email in the last 30 minutes stating that all John Lewis Partnership Cards will stop working at 6pm on 31 October. Accounts with a nil balance at that point will close automatically, while those with an outstanding balance can continue to be paid off normally.
That’s quite a shock - I really expected HSBC to migrate cardholders over to standard HSBC accounts.
Perhaps they’ve decided that doing so just isn’t worth the bother, or maybe John Lewis originally wrote into the license agreement that if their right to use the brand ended at any time they wouldn’t be able to continue serving customers gained under the John Lewis brand directly?
The letters state that the NewDay Partnership card has to be applied for by the exisiting Partnership card holders in October. Can Newday handle millions of applications simultaneously. Also will NewDay issue now retired partnership card holders with a new Partnership Card on the same commercial interest rates as when the card was first issued in 2004-2022 via HSBC. Can JLP FS survive the bad PR
There won’t be millions of applications simultaneously. Were there even millions of JLFS credit cards?
Regardless, unlike HSBC, NewDay have a modern mostly automated application system. They have previously handled the Amazon credit card products and the whole application process for them was very streamlined, probably the most streamlined application for a credit card I’ve ever been through.
Obviously not, why would they?
It takes more than bad PR to bring down a financial services company, as TSB can attest to.
When Waitrose and JLP store customers find that their Partnership credit cards are not renewed or that their credit limits are now much reduced, then as retail store customers they have more ways of expressing their anger in the stores with the same fascia name as on their credit card. Poor store staff, they will be given hell, especially as JLP unilaterally decided to cancel the cards.
Then you clearly haven’t applied for any cards or current accounts from HSBC
John Lewis own the John Lewis Finance brand and have a share in John Lewis Financial Services along with HSBC (who ran it, using their own back-end systems and processes).
JLFS is being wound down - we don’t know the ins and outs of why but the suggestion reported was that John Lewis weren’t happy with HSBC’s management of the venture. JLFS are thus losing the use of the John Lewis brand, and indeed in their letter earlier this summer John Lewis suggested that JLFS would be in touch about what would happen to existing cards after October (as it would not be their place to decide what happened).
JLFS (the HSBC managed JV, not John Lewis) then wrote to all cardholders to state their accounts would be closed.
tl;dr - John Lewis pulled out of the venture but it was JLFS (read: HSBC) who pulled the plug on the cards.
I recently applied for a current account with them and it took between two and three weeks before the account was opened. I don’t call that automated, or modern.
I wasn’t even a new customer, as I already had an HSBC credit card, so it’s not like there was a hold up with ID checks or anything, their systems are just slow and antiquated.
That was exactly my reading of it too.
I also suspect that the details of the joint venture were commercially sensitive so exactly what each party is now allowed to say about the situation is likely to be limited, hence the confusion.
Absolutely, they are an established operator of store credit cards for other brands and have invested in decent technology which seems to allow for modern usually-instant credit decisioning. HSBC, by contrast, are well known for extremely manual and complicated processes plus tight lending criteria. They are therefore hardly an ideal partner in this sort of business. I’d imagine the vast majority of customers will be offered a very similar credit limit from NewDay and shouldn’t face issues getting a card approved.
That’s a fairly typical HSBC experience, along with being sent lots of paperwork in the post!
Was looking at getting one of these. We tend to do the weekly shop at Waitrose anyway but never applied for the old one. Can’t be bothered applying for this new one as it seems I’ll likely be declined anyway.