Withdrawing cash abroad

MonkeyG0D

I have a Halifax clarity card which charges 12.9% APR for cash withdrawals from the date of that withdrawal. I also have a caxton FX prepaid card which doesn't charge interest but gives a rate 2.75% below that of the prevailing interbank rate (I assume this means it will give me a rate 2.75% worse than the halifax card).

What I am trying to figure out is which one of these is better to withdraw cash whilst away

BlueZenith

Assuming you pay the money into your credit card before taking it out (so you won't incur any interest), it all depends on what each card's international ATM charge is and how much you're going to take out. If you have those pieces of information, then the answer will be a simple calculation.

For future reference, if the country you're travelling to uses USD or EUR then you may be interested in getting Citibank accounts in both GBP and the relevant foreign currency. You would then be able to transfer money between your GBP and foreign-currency account at only a 1-2% cost, and you get a debit card that you can set to draw from the right account in the right currency so you'll know exactly how much you've got in advance and won't incur any extra charges.

zagfles

You can't officially pre-load the Clarity. People have reporting doing it no problem, but I wouldn't bother, the interest is trivial for a short holiday. Just check your balance when you get back and pay it all off - don't wait for the statement.

For a 3 week holiday you'll probably pay on average less than 2 week's interest, which is under 0.5%. Which is over 5 times cheaper than the Caxton. For shorter stays the Clarity is even cheaper.

MonkeyG0D

I'm away for just over 5 months travelling through south east asia, new zealand and south america.

Please correct me if I'm wrong but working on a 12.9% APR are these calculations correct

monthly interest = 0.129/12 = 0.01075

Considering £400 of money withdrawn in a month

0.01075 x 400 = £4.30 in interest for that month

where as 2.75% per withdrawal on the caxton fx prepay card works out at

400/100 x 2.75 = £11

Thus making the clarity card better even if I wait until the end of the month to pay it off, I expect that if I pay off the card as soon as i withdraw money I will reduce any interest charged? I'm not sure on this though

leicsmarkyr

I have similar - the Santander Zero card and FairFx Prepaid.

Used the Zero for my holiday for a week and made a few payments whilst on holiday and then the rest to make it go into credit by a couple of pounds when I got back. Statement was produced and was charged £0.44 for the cash interest.

Used both for cash and purchase.

Was much cheaper than the prepaid card.

zagfles

MonkeyG0D wrote: »

I'm away for just over 5 months travelling through south east asia, new zealand and south america.

Please correct me if I'm wrong but working on a 12.9% APR are these calculations correct

monthly interest = 0.129/12 = 0.01075

A bit less as the APR includes compunding.

Considering £400 of money withdrawn in a month

0.01075 x 400 = £4.30 in interest for that month

where as 2.75% per withdrawal on the caxton fx prepay card works out at

400/100 x 2.75 = £11

Thus making the clarity card better even if I wait until the end of the month to pay it off, I expect that if I pay off the card as soon as i withdraw money I will reduce any interest charged? I'm not sure on this though

You get charged interest from the date of withdrawal to the date you pay it off. So if you pay it off immediately after the statement date you'll pay something between 1 and 31 days interest depending on when in the month you made the withdrawal.

If you set up a DD to pay it off then you'll pay an additional 25 days interest as (I think) DDs are taken 25 days after the statement date. So between 26 and 57 days, on average more than a month's interest.

But yes the best way is to pay it off ASAP after making the withdrawal (may need to allow a few days for the payment to filter through), then you'll pay a very trivial amount of interest maybe 0.1%.

But be wary of using internet cafes etc for online banking...

It gets complicated if you try to maximise the interest free period on purchases at the same time - I really wouldn't bother. The thing to remember is that although cash advances are paid before purchases, payments always go towards items on a statement before items not yet on a statement.

MonkeyG0D

zagfles wrote: »

A bit less as the APR includes compunding.



You get charged interest from the date of withdrawal to the date you pay it off. So if you pay it off immediately after the statement date you'll pay something between 1 and 31 days interest depending on when in the month you made the withdrawal.

If you set up a DD to pay it off then you'll pay an additional 25 days interest as (I think) DDs are taken 25 days after the statement date. So between 26 and 57 days, on average more than a month's interest.

But yes the best way is to pay it off ASAP after making the withdrawal (may need to allow a few days for the payment to filter through), then you'll pay a very trivial amount of interest maybe 0.1%.

But be wary of using internet cafes etc for online banking...

It gets complicated if you try to maximise the interest free period on purchases at the same time - I really wouldn't bother. The thing to remember is that although cash advances are paid before purchases, payments always go towards items on a statement before items not yet on a statement.

Yeah I'll be taking a netbook with me to do banking on whilst away because I don't want to be caught by keyloggers etc on public machines in hostels/internet cafes


Anyway thank you all for your responses I'll be using my clarity card for cash withdrawals, but I'll take my caxton card as a backup, in case the clarity gets blocked or stolen!

zagfles

MonkeyG0D wrote: »

Yeah I'll be taking a netbook with me to do banking on whilst away because I don't want to be caught by keyloggers etc on public machines in hostels/internet cafes


Anyway thank you all for your responses I'll be using my clarity card for cash withdrawals, but I'll take my caxton card as a backup, in case the clarity gets blocked or stolen!

Good plan - give Halifax a ring to tell them you're going abroad to hopefully avoid the card being blocked.

luci

Make sure you call the Halifax and complete a Holiday Form so that they know you will be using the card abroad.

* Edit - posted at the same time.

lisyloo

Yeah I'll be taking a netbook with me to do banking on whilst away

There is still thoerectically a risk if you are using wifi. It's lower than using shared computers.
Personally I wait till I get back and pay £2-£3, which is about the price of a coffee.

luci

The Halifax website states that credit cards now take faster payments so the money should hit your account as soon as it is paid rather than 3 days later.