Halifax Clarity interest when money held by car hire company

misa.blue

Hello
I'm in process of getting Halifax Clarity credit card for our trip to USA.

We will hire car for 8 days (21-29 April), the hire company will hold some $300-$500 deposit on card till we return car.

I would like to know, if we get charged interest by Halifax on this amount?

richardw

Some just reserve the amount from your card, but only charge at the end of the rental if necessary.

misa.blue

richardw wrote: »

Some just reserve the amount from your card, but only charge at the end of the rental if necessary.

I'm sorry to be pain, don't know much about credit cards.
So if they just reserve it, then we will not be charged any interest?

Also if we set up direct debit to pay of balance every month, this reserved amount will not be paid by direct debit, will it?

eslick

they dont charge your card unless, you dont bring the car back, have an excess to pay, petrol to pay or others. they swipe it and that puts a reserve on for future payments. hotels do this as well.

Inactive

Even if they did charge ( which I doubt ) it is only a small amount 8 days @ 12.9% APR., which equates to very little.

Takecareofthepennies

The car hire company will only take a so-called "pre-authorization" on your card for the purposes explained by eslick above. While this will affect the amount of credit available (as they "ring-fence" a certain amount), it does not actually get debited unless there are further charges upon return of the vehicle.

The practical reason for this is that the rental company has no desire to endlessly chase you for any money they think you owe. Slightly off-topic: This is understandable from their point of view, but you will find any number of complaints on this board from people who feel they have been over- or unfairly charged for this, that, or the other in connection with their rental.

You will not be paying any interest. The advice above re. full monthly payment by DD obviously applies - if you don't need to borrow on the card.

choc_mouse

Some hire companies I've used do charge the "deposit" to the account on top of the hire charge and then refunds that amount when you return the car. So depending when your billing cycle is you won't effectively be charged any interest. If you pay off your bill in full each month, then you won't be charged interest at all because it's a purchase (not cash advance).

bagand96

Surely there won't be any interest payable as it will go through as a retail transaction anyway. And with retail transactions you get an interest free period - i.e. it interet free if you pay it off when the bill comes.

This is of course different with cash transactions (i.e. using a cash point) as they attract interest from the moment of the transaction.

Unless of course I am wrong and the car hire companies can actually charge it as a cash transaction?

misa.blue

Many thanks guys, I'm new to Credit card, so was not sure.
We got the card paperwork and interest rate given to us is 17.99%..

photome

misa.blue wrote: »

Many thanks guys, I'm new to Credit card, so was not sure.
We got the card paperwork and interest rate given to us is 17.99%..

That is higher than the guide rate in the travelmaximiser, I got 12.9% which is the rate on which the interest is worked out on the maximiser just so that you are aware that your interest payments will be a bit more than the qouted £10 per thousand per month.

But you shouldnt get any interest on the held money as it is not a purcahse or advance

DavidHayton

choc_mouse wrote: »

Some hire companies I've used do charge the "deposit" to the account on top of the hire charge and then refunds that amount when you return the car. So depending when your billing cycle is you won't effectively be charged any interest. If you pay off your bill in full each month, then you won't be charged interest at all because it's a purchase (not cash advance).

I have suffered the annoyance of a $1000 deposit (on a campervan) being charged and then re-credited when I returned the vehicle. The exchange rate had moved against me in the meantime and I was out-of-pocket by about £20. One of those things ... not worth getting hot and bothered about.

David