Santander Zero Cash Withdrawl Interest

trying_2_b_good

Hello!

I have a Santander Zero card. It's my first credit card and I got it for protection on internet spending and for spending abroad. Just reading martin's CC guide and came across this...


Santander Zero has no usage fees worldwide. You'll pay 27.9% cash withdrawal interest even if you fully repay.

I don't really understand this statement. Is it basically saying that the best way to use the card abroad is to only use it in shops - NEVER withdraw from the machine as you'll get charged a ridiculous 27.9% ???

Going on honeymoon in a couple of months, but trying to make sure I know what I'm doing and don't face nasty charges when I get home!

Thanks :beer:

CLAPTON

well if you withdraw 100 and pay it back in say 4 weeks the interest will be about £2.15
whether you consider that rediculous only you can say

presumably you are aware of foreign transaction fees and charges on your other debit and credit cards

trying_2_b_good

Oh ok - I don't know how to work out interest. To me 27.9% of £100 is £27.90! That's why I'm all confused and haven't had credit cards before! I'm learning, be gentle! (And yes, I have been backing ML's financial education in schools campaign for precisely this reason!)

Usually when I'm abroad I just exchange my spending cash before I go and I've never used any cards abroad before...

So depending on rates it may be better for me to withdraw cash from the card when abroad rather than doing it all before I go? And even better to just pay on the card in shops where possible?

CLAPTON

well 27.9% APR means that if you owe 100 for one year then you will get charged £27.90; however if you only owe it for a less time then you will pay less so if you borrow the money for 4 weeks the interest will be 100 x 27.9% x 4/52 = 27.90 x 4/52 = £2.15

just as if you open a savings account paying 3%AER that means that if you save 100 for a full year you get £3 interest; if however you save for a lesser time you will receive less interest

in general the santander card seems a reasonable way of drawing cash or spending money abroad as long as you pay the balance off in full; whether it's cheaper to get cash depends upon the exchange rate and charges for getting cash and the costs of converting any left over back again.

trying_2_b_good

Thanks - load of my mind!

CLAPTON

just one final point: make sure you have at least two ways of payment just in case you lose the card or for whatever reason it is rejected at ATMs or in a shop

ihateyes

CLAPTON wrote: »

well 27.9% APR means that if you owe 100 for one year then you will get charged £2.79; however if you only owe it for a less time then you will pay less

just as if you open a savings account paying 3%AER that means that if you save 100 for a full year you get £3 interest; if however you save for a lesser time you will receive less interest

in general the santander card seems a reasonable way of drawing cash or spending money abroad as long as you pay the balance off in full; whether it's cheaper to get cash depends upon the exchange rate and charges for getting cash and the costs of converting any left over back again.

Sorry 27.9% over one year on £100 is £27.90.

CLAPTON

ihateyes wrote: »

Sorry 27.9% over one year on £100 is £27.90.

thank you, I have corrected my post accordingly
one really does need to proof read one's posts