Paying for travel money with a credit card - Change Group

wilderness_man

Change Group, providers of foreign exchange, say, in their FAQs, "If your payment is made using a credit/debit card a fee may be charged by your card issuer as a cash advance fee in addition to interest if applicable. "

What do credit card companies in the UK actually do? Is it standard practice to charge such a fee - or is it unusual?

Is it standard practice to charge interest - or is it unusual?

And what about debit card companies?

izools

As you will be using the card to obtain cash, the cash advance rules apply.

This is normally a 3% charge or £2.50 which ever is higher.

You will also accrue interest at a higher rate than purchases.

Check your credit agreement or call your credit card company for full information on how your paticular card operates.

It is a very bad idea to get a cash advance with a credit card.

I would suggest a Post Office or Nationwide credit card and use the card itself abroad, that way you won't pay horrendous rates and won't incur overseas transaction fees (I think PO and Nationwide cards are the only ones not to charge such overseas fees)

wilderness_man

Thanks for that, izools.

"As you will be using the card to obtain cash, the cash advance rules apply."

I can see that. But since I'm not obtaining the cash from the credit card company, but from a third party, I assumed that they wouldn't treat it as a cash advance. After all, it doesn't make any difference to them whether the Change Group are supplying me with Euros or boxes of chocolates.

I was ordering in a hurry and didn't read the small print carefully. I clearly should have used my debit card! I guess I qualify as a money saving numpty.

I've never paid any interest on my credit card, since I always pay it off by direct debit at the end of the month. Can I pay back the money from my current account to the credit card company immediately?

izools

wilderness_man wrote: »

Thanks for that, izools.

"As you will be using the card to obtain cash, the cash advance rules apply."

I can see that. But since I'm not obtaining the cash from the credit card company, but from a third party, I assumed that they wouldn't treat it as a cash advance. After all, it doesn't make any difference to them whether the Change Group are supplying me with Euros or boxes of chocolates.

I was ordering in a hurry and didn't read the small print carefully. I clearly should have used my debit card! I guess I qualify as a money saving numpty.

I've never paid any interest on my credit card, since I always pay it off by direct debit at the end of the month. Can I pay back the money from my current account to the credit card company immediately?

The reason you will be charged Cash Advance rates is because the Charge Group notify the card company that it is a cash advance at point of sale. The reason the cash advance rates apply is because credit card companies consider those that obtain cash using their card to be a higher risk than those using the card for purchases, so the higher interest is levvied to offset the risk; ergo the difference it makes to the card company.

You can pay the monies from your current account to your credit card immediately, yes, and the sooner the better, as being a cash advance transaction, it will be accruing interest daily irrespective of whether or not you settle your bills in full

Shouldn't be much if it's been under a month though

wilderness_man

Thanks for that.

"Shouldn't be much if it's been under a month though "

Probably about a fiver per month, actually!

simongregson

Remember, don't spend on the card until the cash advance is cleared, as they clear this after any lower paying balances (e.g. purchases)

Andyjenk

Is it cheaper to pay cash for currency in a high-street outlet or to order online for the "best" deals and have to pay the banks cash advance charges for paying by debit/credit card?

((I was told that cash advance charges for currency were only made if the DEBIT card carried the VISA logo. Is this true?

izools

Andyjenk; cash advance fees aren't applicable to DEBIT cards, only CREDIT cards.

It doesn't matter what the payment network is, Visa / Mastercard / Amex don't levvy the fees and interest, the card issuer does.

If you pay by debit card there are no fees / interest.

If you pay by credit card you should check the T&C to find out how cash advances are charged.