can I repay credit card cash withdrawal early to avoid charges/interest ?

christopher_h

Hi folks,

I needed to withdraw £200. cash on my Visa Credit Card yesterday to buy a second hand car at short notcie - I didn't have enough cash on me and the car was perfect so I had to act quickly - thankfully I did the right thing and the car was lovely so I bought it.

I've been reading about extortionate charges for withdrawing cash on a credit card - is there any way to reduce their charges for example - can I pay it off early via debit card or pop into a bank and pay over the cash ?

Any advise appreciated, thanks.

Chris

Angeldelight_4

Hi Chris,

Do you already have a balance on your visa? If you haven't and you only have the £200 on it then yes, you can pay it off whenever you like, send a cheque, pay through online banking etc.

If you already have a balance on there, the credit card company would usually put any payments towards the balance that attracts the least amount of interest first, meaning the cash advance will be sitting on your card until absolutely everything else is paid off. The only way to shift it is to BT the entire balance to another card, trying to avoid BT fee's in the process!!

YorkshireBoy

Cash withdrawals invariably incur a (circa 2.5-3%) fee and interest accrues from day one, ie unlike purchases which qualify for up to 56 days interest-free.

Although you can do nothing about the fee, you should pay off your entire* credit card balance as soon as possible to minimise the interest charged.

However, because there will always be a time lag between paying/sending your payment and it being applied to your account, you should overpay (by the amount of the fee and an estimate of the interest) to stop the interest accruing.

* If you have an existing purchases/BT balance, this will generally be paid off before the cash withdrawal element, meaning the latter sits accruing circa 24.9% APR until the entire balance is cleared.

christopher_h

thanks guys - I did a direct bank transfer to cover all purchases plus the cash withdrawal and charges so they should only have about 2 days of interest plus small handling fee - yippee ;-)