Overpay credit card to avoid interest payments on cash withdrawals?


I have recently applied for the Halifax Clarity Credit card, mainly due to the fact that it does not charge any fees for using the card abroad.

However if you withdraw cash (which I will be abroad), there is an interest charge of 12.9% per annum even if you pay the balance off in full. This interest charge is charged as soon as the cash taken out.

So for example if I withdraw £100 worth of foreign currency and have a direct debit to pay off my balance off in full, I will still be charged £1.06 as an interest charge for that month.

Now I have heard you can get around this by pre-paying your credit card, i.e. paying off £1000 even though you owe nothing, and then when you withdraw cash, the interest will be paid off instantly (hence no interest charge) if of course the withdrawal is less than £1000.

Please can anybody confirm if this is correct?

Many thanks!!!



  • daniel598
    daniel598 Posts: 63 Forumite
    This is not allowed on the clarity card as in the terms. If you overpay Halifax will return the funds to the donor bank and if repeated you could face your card been cancelled.
  • BBunter
    BBunter Posts: 7 Forumite
    First Anniversary Combo Breaker First Post

    This is a question that has been asked many times (a quick search will give you the answer)....

    In short loading your card before you go is against the terms and conditions and can result in your payment being returned to you and your account being cancelled.

    Has this acutally happened to people...no idea.

  • dnf999
    dnf999 Posts: 5 Forumite
    Great, thanks for the advice!
  • ManAtHome
    ManAtHome Posts: 8,512 Forumite
    First Anniversary Combo Breaker
    The quid (1% ish) is the worst case - drawing cash on day one of a month's (or longer) hols with no internet accesss (or you could transfer funds the same day as the ATM transaction) - in practice, more likely to be around half of that.
  • VK-2008
    VK-2008 Posts: 926 Forumite
    withdrawing on credit card is worse thing too do avoid at all costs if you can

    most banks will def return extra money paid and they can close your account for doing so
    i would not risk it
    :A VK :A
    CLAPTON Posts: 41,865 Forumite
    Combo Breaker First Post
    just make a payment the next day and you will pay about 4p for the interest... good value
  • chattychappy
    VK-2008 wrote: »
    withdrawing on credit card is worse thing too do avoid at all costs if you can

    It's certainly not in the case of Zero and now Clarity. This can be the cheapest way to get cash abroad. No fee and no forex loading. Only the interest - and if you pay back the next day or so the interest is minute - about 7p on £100 per day.

    I have used Zero this way ever since Nationwide started loading their debit card.

    Just some posters have suggested pre-loading to avoid even this amount of interest and the hassle of having to make a payment whilst away. You're not supposed to do that and it might not work.
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