Credit Card and foreign currency

mustachio

I got my first ever credit card on the sole advice from Martin Lewis that a) they improve credit rating b) that the Halifax one currently offers 0% charge on foreign currency. I have no debt and don't intend to get into any.

I received it through the post this week and have discovered that the catch is they will charge from day 1 for any cash withdrawn abroad.

So this means that ultimately there is still a charge. Is there a realistic way around this? The only realistic way round this that I can think of is to withdraw the cash from the credit card then transfer the money straight away from my current account via the internet.

Any thoughts and ideas? I am surprised Martin Lewis didn't mention this was a catch. I am only likely to withdraw £300 on my holiday later this month....and am not great with maths so any thoughts appreciated....maybe I'm better of cutting the card in half after all.

zagfles

You mean the Clarity? For a start the interest is mentioned

Plus there's no fee for cash withdrawals, though you will be charged interest on them even if repaid in full.

Secondly the interest will be far less than the charges hidden in the rate when you change cash. The Clarity will give you MasterCard exchange rates which are pretty much interbank, most cash exchange places will mark up the rate about 5%.

Pay the Clarity off as soon as you get back off holiday (don't wait for the statement) and the interest will be trivial.

bigadaj

Bottom line is, shock and horror, a business wants to make money. Whatever you do it will cost you, whether this is an explicit fee or a worse exchange rate.

Assuming you have the clarity card at a 12% rate then that is 1% per month. Exchange rate is near perfect, so that means cash is costing you, assuming your £300 for two weeks, that will be a total cost of £1.50. You could minimise this to virtually nothing by using online banking overseas but given the fact it is a holiday, the potential for overseas roaming charges and banking security then I wouldn't bother. Your choice though.

unimaginative_user_name

To give you an example my husband withdrew €150 in cash in Portugal. When we returned from holiday we paid the bill straight away before the statement came, and when the bill came we paid 31p in interest which is negligeable when you also take into consideration the fact that the conversion rate used is better than we would have got if we'd exchanged cash.

I was certainly aware that there would be interest charges when I applied for the card but bearing in mind that most other cards charge an ATM fee per transaction as well as interest the Halifax Clarity really is a great card for overseas provided you pay the balance in full.

By the way our APR is 21%. If we'd got the 12% rate we'd have paid less!

Venusflytrap

Or open a bank account with Metro Bank (if you are near or London-based) or N&P Building Society (online) and their debit cards are fee-free on foreign cash withdrawals and card purchases.

I have a Halifax Clarity which has been a brilliant travel companion (for foreign cash withdrawals) even at 17.9% APR; a NW Select CC for foreign card purchases and now a N&P debit card (still on it's way) as a back up for both CCs.

It's a worthy plan to have at least one back up especially when far from home.

mustachio

Thanks for all responses which has really put things into perspective. Much appreciated.

Maestro.

I would be interested to know if the OP was indeed talking about Halifax One or the clarity. I have bank of Scotland's version of the "One" and would be over the moon if I found it had free foreign exchange.