withdrawing cash on a c/c

endisforever_2

does this look bad on your credit file

i was in my bank today and they advised me not to do it for this reason

???

Innocent_Guy

This is true, Lenders are reporting more and more information and withdrawals from CC make you look desperate.

opinions4u

1) They usually charge you a fee - typically 3% of the amount withdrawn with a £3 minimum (varies from card to card).

2) They usually charge you a higher interest rate on cash advances, typically over 20% APR (varies from card to card).

3) Even if you clear the balance in full, they charge you interest from the date of the cash advance, rather than from the date of the statement.

A cash advance won't show on your credit file. But it will show on your internal scoring with the bank. One of the big flag warnings for me when I was underwriting mortgages was the size of cash advances on credit cards. The bigger and more frequent they were the less likely I was to offer the mortgage.

Internal scoring systems will, most likely, work the same way.

I hope that helps.

BlondBoy

Are overseas cash withdrawals treated the same? eg cash when on holiday or when away on business?

Presumably it's clear to see a foreign currency withdrawal as opposed to one in Sterling?

YorkshireBoy

opinions4u wrote: »

A cash advance won't show on your credit file.

Lenders are now starting to report both the number of, and value of, cash advances to the CRAs on a monthly basis...

http://experian.metafaq.com/resources/experian/Downloads/credit_report_explained_Aug09V4.pdf (pages 16-17)

YorkshireBoy

BlondBoy wrote: »

Are overseas cash withdrawals treated the same? eg cash when on holiday or when away on business?

Internally...possibly not, if infrequent.

Externally (and under the new reporting format above)...most definitely yes!

olly300

BlondBoy wrote: »

Are overseas cash withdrawals treated the same? eg cash when on holiday or when away on business?

Presumably it's clear to see a foreign currency withdrawal as opposed to one in Sterling?

Definitely don't do an overseas cash withdrawal.

They charge you even more for it.

Number_Six

So "withdrawals from CC make you look desperate". Why does it matter if someone withdraws cash on a CC? You pay extra for it and agree to the charge when you withdraw the money. I've done it a few times when the only card I had on me at the time was my credit card and needed a few quid. I am very careful about using debit cards anywhere, if they get cloned it's my money the fraudsters are stealing, if my credit card gets cloned it's the banks, not mine. What does it matter - if you borrow money on a credit card and apy it back in full (I always pay me balance in full every month) then why should that make me look "desperate?"

This mentality is typical of out of touch middle managers and administrators, today there is so much fraud about you have to be very very careful where you use any card. That's why I do not carry my debit card around as much as I used to and only use it in trusted areas inside a building - supermarkets for example. Otherwise it's a credit card - for my own protection, not because I am "desperate".

schoolrunmum

We have just run into this problem.My husband is a BA long haul pilot. Obviously he usually uses his debit card to get cash at ATMs abroad-however,occasionally it doesn't work,so he'll try another card-sometimes a CC. It's not at all that we are desperate for cash,it's just that was the only card that worked. We have just been refused new mortgage because of the cash withdrawels on CC-even though we pay it off in full without fail every month..not sure what to do about this....oh, and if DEF does show on your credit file-I've seen it!

YorkshireBoy

schoolrunmum wrote: »

We have just run into this problem.My husband is a BA long haul pilot. Obviously he usually uses his debit card to get cash at ATMs abroad-however,occasionally it doesn't work,so he'll try another card-sometimes a CC. It's not at all that we are desperate for cash,it's just that was the only card that worked. We have just been refused new mortgage because of the cash withdrawels on CC-even though we pay it off in full without fail every month..not sure what to do about this....oh, and if DEF does show on your credit file-I've seen it!

I'm sorry but I find it extremely hard to believe that the "occasional" cash withdrawal on a credit card was the sole reason for a mortgage refusal...especially for an airline pilot, and even more so bearing in mind the additional reporting of such cash transactions/balances has only just begun (a few months ago max?).

There must be another/additional reason(s).

Treadmill

With the sort of salary an airline pilot commands (100K+) the lenders are normally queueing up to kiss your behind, it can't just be about the cash withdrawals