HSBC has retracted changes that would have prevented customers from depositing extra cash into their credit card accounts.

In a letter dated July 28, the bank advised card holders that the changes notified a month earlier will not be implemented “for the time being”.

Conditions of use had always insisted that credit card accounts could not be kept in credit and the holder would bear “all the risks associated with unauthorised use of the card”.

The rules made it clear that any credit balance held on a credit card did not bear interest.

However, in June the bank went one step further. The rules changed to give the bank authority to transfer any credit on the card to another account belonging to the customer and charge a transfer fee.

The bank also reserved the right to block any extra money being deposited on the credit card.

The bank had justified the move when asked about the rule change last week. An HSBC spokesman said this was done to reduce the number of clients keeping a credit card account in credit because “it increases the potential impact of a fraud loss if it were to be lost, stolen or otherwise compromised”.

But the latest letter informed customers that the card conditions of use would not change “until further notice”.

HSBC also apologised for any inconvenience caused by the June letter, which had panicked those customers who normally put extra cash on their credit card when going abroad.

The bank did not give a reason why it retracted the changes announced in June.

Any changes to terms and conditions of credit cards do not require authorisation from the Malta Financial Services Authority but banks are required to communicate changes to card holders at least two months before the change comes into effect.

ksansone@timesofmalta.com