positive balances on credit card

steveviney

I am travelling to Canada next year and want to get a Nationwide Credit Card to save on spending fees. I see that I will be charged interest on cash withdrawals until I pay off the balance.

My question is can I pay a positive balance onto the card before i leave in order to avoid paying interest. Is it possible to force a credit card into positive balance ? will it prevent the interest charges as I hoped ?

innovate

Be aware that it's the nationwide debit card, not their credit card, which allows fee-free cash withdrawals. So probably get one of them for your cash withdrawal needs.

For your other spending:
If you set up a standing order to pay off your credit card in full, you shouldn't need to pay interest on any credit card spending. This is probably better than overpaying because your money can earn interest in your current account. If you want a credit card which can have a positive balance and which pays interest on it, you should consider Egg Money - though they charge for foreign transactions.

johnllew

innovate wrote:

If you set up a standing order to pay off your credit card in full.

Do you mean direct debit?

tobago22

I have a Nationwide Credit Card that I keep for using abroad. I did a BT in November from my Egg card as it was my anniversary month. This put my Nationwide card into positive balance.
When I telephoned Nationwide to inform them that I would be in the States I was told that they do not like to see accounts in positive balance.

innovate

johnllew wrote:

Do you mean direct debit?

sorry, yes , of course :wall: :wall:

HGLTsuperstar

tobago22 wrote:

I have a Nationwide Credit Card that I keep for using abroad. I did a BT in November from my Egg card as it was my anniversary month. This put my Nationwide card into positive balance.
When I telephoned Nationwide to inform them that I would be in the States I was told that they do not like to see accounts in positive balance.

but did they actually take any action, or did you just get a verbal telling-off?

jimmyjim_uk

steveviney wrote:

I am travelling to Canada next year and want to get a Nationwide Credit Card to save on spending fees. I see that I will be charged interest on cash withdrawals until I pay off the balance.

My question is can I pay a positive balance onto the card before i leave in order to avoid paying interest. Is it possible to force a credit card into positive balance ? will it prevent the interest charges as I hoped ?

Wouldn't it be easier to open up a Nationwide current account. They give Visa debit cards with the account.

steveviney

too much hassle setting up a current account for a holiday

yes i know i will pay 1.5% or £1.50 to withdraw money, but still save on the 2.5% transaction charges. It's just a cheaper convenient way of getting to my money whilst out there.

You pay interest on cash withdrawals form day1 so even if you pay by direct debit you still pay interest on cash withdrawals. By going positive I was guessing i could avoid this

grumbler

steveviney wrote:

I am travelling to Canada next year and want to get a Nationwide Credit Card to save on spending fees.

steveviney wrote:

too much hassle setting up a current account for a holiday ...

I don't think that opening a current account involves more hassle than getting a credit card. And their e-savings account with instant access and 4.75% is very good too ...

Dave_the_Ginger_Cat

You're all correct, card issuers do not like customers being in credit. It tends to be outside the terms of conditions of them.

In reality, customers keeping their accounts in credit are unlikely to raise any significant eyebrows. It is largely a manual process to return credit balances to customers, and since the banks are earning interest on your money whilst this is occurring, by & large they don't care.

Placing a significant lump sum to bring an account into credit is however likely to get you noticed, and you may get this sent back to you while you are away completely defeating the object of your exercise.

By doing this may lose the proection of the consumer credit act (s56 s75, et al) by not having a debit balance - it is hard to enforce overseas, but a lot of issuers, NBS included from memory, continue to honour this. This could mean less consumer protection, and I'd be interested in anyone's firm view on this.

Because of the way interest is charged, you will pay interest from the day of the withdrawal, and this will accrue until the day you pay it off. Your payments will generally be credited against the lowest interest rate first which is likely to be the purchase rate. For this reason, you would have to keep your account a good amount in advance to cope with this.

All in all, I'd say it were a complex way to avoid a small amount of interest. If you have the funds available to pay a credit card in credit, I'd recommend the current account mentioned earlier which seems to have lower charges and no interest to boot.

Dave

YorkshireBoy

Dave_the_Ginger_Cat wrote:

By doing this may lose the proection of the consumer credit act (s56 s75, et al) by not having a debit balance - it is hard to enforce overseas, but a lot of issuers, NBS included from memory, continue to honour this. This could mean less consumer protection, and I'd be interested in anyone's firm view on this.

The Egg Money T&C's would seem to contradict this theory, as it "designed" to be pre-loaded with your spending money. So, in effect, you are spending your own money - but still enjoy section 75 protection.