Confused by LloydsTSB Airmiles duo credit card

Steve1977

In the next few weeks I'll need to pay a builder (in cash) for fitting the Kitchen, however we don't get the funds till January, so in the interim I was going to pay for it on credit card.

Now because I need the physical cash I clarified from Lloyds TSB that it's possible to ask for the money over the counter from any branch, with the only downside being that I would have to pay 3% for handling.
This I can take...but then I was told that I would acrue interest DAILY on what I have used it for. She went on to say that when I draw money out from the cashpoint, this is subject to a fee and it accrues a greater number of interest which is calculated daily. So If I withdraw £10, + 27% = £2.70...so I am charged per month, £2.70 & 30 (or 31) - depending on how many days in a month. Is this how it works?

What the hell? I was never told this! I'v been successful in getting an Abbey National Zero card and so I'm going to Balance Transfer the money for free but I'm confused whether to ditch the Lloyds TSB card when I'v done this.

Why am I confused? I'm confused because I always use my credit card for anything...but is it the case that all credit cards charge you daily for using your card at the cashpoint?
Furthermore, if I withdraw £10 from the cashpoint using my LloydsTSB card, I will acrue interest at 27.9% daily? Or is it monthly?

The Abbey National representative assured me that the interest is calculated monthly but Lloyds said it would be daily.

I'll probably stick with Abbey anyway but it is a slightly higher interest rate, but they don't charge you for withdrawing money and have quite a few other benefits. Swings for roundabouts i suppose...they don't penalise you for anything but charge slightly higher interest.
If anyone could clarify the above things it would be most appreciates.

YorkshireBoy

When you make a cash transaction* on a credit card, you normally incur two 'penalties'...

1. A cash withdrawal fee.

2. Interest accrues from day one, and (normally) until you completely clear the entire statement balance for two consecutive months.

The cash withdrawal fee is normally a percentage of the amount withdrawn, but with a minimum of £2.50 to £3.00, and is typically 3%.

The cash advance interest is normally a much higher rate than that charged for purchases and balance transfers.

The 27.9% figure you mention is an APR, ie annual rate after compounding. The non-compounded annual equivalent for 27.9% APR is 24.89% (see http://www.stoozing.com/mon2yr.htm). It is this 24.89% rate that is divided by 365 to give you the daily rate charged on your balance. The monthly rate you often see quoted in summary boxes is simply 24.89% divided by 12 = 2.0718% which, for a static balance, is normally all you need to use for a rough guide.


If I understand you correctly, you're going to withdraw money over the counter on LTSB (is there a maximum?) and then BT this away to Abbey? If so, make sure you 'overpay' the Abbey BT adequately so as to stop the LTSB interest accruing. Once you've done this, do not use the LTSB card again until you've received your next statement (which will show a small positive balance).

Longer term, you'll have paid over 3% for 6 months 0% on the kitchen cost. What are your plans for month 7 onwards?


* ATM withdrawal, over the counter withdrawal, buying foreign currency, gambling site deposits, etc.

Steve1977

Yeah, I was confused by this because given the information, I thought I was potentially being charged close to £100 for a £10 withdrawl

My balance typically hovers around the £600 mark but lately I'v got it down to £300. But how does it know which interest is worked out?

Lets say I withdraw £40 during a month but I spend a further £60 in shops. I am charged a greater amount of interest for the £40 than I would be for the £60. But if I then pay off £60, how does it know that £40 of this could have been the cashpoint withdraw?

Regarding Month 7 onwards, we'r getting a three year loan at the same time as our seven year mortgage. Cause we'r doing them at the same time we have got a loan rate of 6.7% (give or take..can't remember off top of my head)

So come January, I'm going to pay off anything relating to the Kitchen from the Abbey Zero card and then regarding the rest of the money (which equals £600 roughly), I am going to use the luxury of 5/6 months no interest and use this to get my current account 'back in black'.
After reading all this information though, I'v decided to cancel the Abbey Zero card after 5 months. Also going to stop using the credit card for cash withdraws and use my current account. Something I can do from Jan onwards due to winding down my overdraft due to the Abbey 0% for 5 months.

But let's say I withdraw £10 from the Bank the day after I receive my latest Bill. How much interest would I be charged by the time I received my bill?