Confused re credit card for abroad

succuba5

Hi

Understanding numbers isn't my strong point so I'm hoping someone can help with this.

I normally exchange cash when going abroad but I was reading about the Halifax Clarity credit card and thought I might apply for it.

In the section about travel money and credit cards Martin mentions that you get the best exchange rate possible. How do you know what this is? Is there a way of finding out on a daily basis while you're abroad?
Also you might be able to exchange in advance at $1.59 to the £ and then if the exchange rate drops while you're away then am I right in thinking you won't get as good a rate?

If you're charged interest on the card even though you repay in full doesn't that negate any potential gains you've made from having the card in the first place?

Also in the T&Cs it says (I think) that you do not pay interest if you pay if full:

3.4 If you pay the total balance shown on your current statement by the payment date (and have also paid the total balance on your previous statement by the payment date), then we will not charge interest on purchases shown on your current statement. On all transactions where we do charge interest, we charge it from the date we first charge the amount to your account.

Any help is greatly appreciated!

Thanks

lisyloo

How do you know what this is? Is there a way of finding out on a daily basis while you're abroad?

If you have access to the internet then yes.
Here's the VISA site.
http://www.visaeurope.com/en/cardholders/exchange_rates.aspx

Halifax will only charge you the visa rate (I think it's a visa card from memory).
Is this what you want to spend your holiday doing?

Also you might be able to exchange in advance at $1.59 to the £ and then if the exchange rate drops while you're away then am I right in thinking you won't get as good a rate?

Yes it changes daily and even during the day.
Usually minimally.

If you're charged interest on the card even though you repay in full doesn't that negate any potential gains you've made from having the card in the first place?

I'm not sure what you mean by potential gains but changing currency is not free.
If you went to change cash at a hotel or high street money lenders or even a reputable bank then they will charge you commission.
The interest is very small and better than virtually any other method if you pay it off when you get back home.
If you're keen to spend your holiday on the internet you could even make payments on line when you draw out the cash for very fast repayment and very small interest.
What do you mean by potential gains? (just to check there is no misunderstanding).
The point is to save on the commission as much as possible and not to make gains (although there are potential safety benefits to not carrying large amounts of cash around).

then we will not charge interest on purchases shown

The significant word here is purchases.
A purchase is goods or services (restaurant, massage, haircut) that you purchase.
It does not apply to cash.
Cash has interest applied straightaway until it's paid off, but it's still a very cheap way of converting the money.

Let us know if you have further questions.

succuba5

Thanks for your response.

The Halifax card is mastercard. I wouldn't check the internet everyday - it wouldn't be much of a holiday!

I've never paid commision for changing currency so I do mean the gains between getting a rate at an exchange vs the interest.

Re the last point, ah ok I get it now! they'll only charge you interest if you withdraw money. I'd be unlikely to do that. I'll probably take some cash out with me and then perhaps have the credit card.

Thanks!

lisyloo

The Halifax card is mastercard

The same thing applies.
The rates are available and there are no charges included.

I've never paid commision for changing currency

Do you mean you've never been abroad before or you aren't aware of the charges?
They are hidden in the exchange rate which might mean you aren't aware of them.

So let's say it's 10 french francs to the pound.
If you were buying the bank might give you 9 as their "buy" price, so they get to keep 10% (not realistic but easy example).
If you were selling francs in the UK then their "sell" rate might be 11 for each pound.
So you won't explicitly be aware of a charge but the commission is included.

Similarly for credit cards.
Many charge about 3%, so the exchange rate will be altered to include their commission.
It won't be shown though, so some people aren't aware.

If you've changed currency then you almost certainly have paid commission. Bank staff don't turn up for free. There are costs involved.

so I do mean the gains between getting a rate at an exchange vs the interest

I am pretty confident that the interest you pay on Halifax will be a lot less than banks/hotel/money exchange places.
Probably quite significantly.
This assume you pay back your money in a timely fashion.
You might for example pay 0.5% with Halifax and probably about 3% would be a good rate elsewhere. Up to 10% for some less normal currencies.

I'd be unlikely to do that.

Well the whole big selling point of the Halifax card is the low rate on cash (as well as nothing on purchases).

I'll probably take some cash out with me and then perhaps have the credit card.

Why would you want to change cash here with commission of between 3% and 10% when it's so much cheaper with Halifax?????

Plus you have the risk of carrying it.

I get the feeling you are not aware of the currency commission you are being charged over here because it's "hidden" is a worse exchange rate.