Halifax Clarity questions

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I have now applied for this card and got 21.9% APR, not the representative rate of 12.9%.

How does this affect the value of using the card for withdrawing cash while abroad? What will the daily rate be and does this make it a worse deal vs. using cash at a worse exchange rate OR an alternative credit card that charges a fixed fee?

Also, the chap who helped me at a Halifax branch said that he would never recommend using a credit card for cash withdrawals overseas, and also that doing so may look bad on a credit report as it can be interpreted as a sign of financial hardship ...
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  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    well approximately the daily rate of interest for an 21.9% APR is

    21.9%/365 = 0.06%

    so e.g. if you withdrew £100 and repaid in 20 days you would pay approximately £1.20 which is cheaper than cards that charge 2.99% fee

    it is true that cash withdrawals are marked on your credit reports
  • slhqoue
    slhqoue Posts: 121 Forumite
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    Hmm, the APR thus seems fine, and actually I could ask a family member to pay it off using online banking straight away in an email.

    The main problem seems to be the credit report one - is this a big deal?
  • opinions4u
    opinions4u Posts: 19,411 Forumite
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    slhqoue wrote: »
    The main problem seems to be the credit report one - is this a big deal?
    Almost certainly not. Unless you are maxing out your card with cash withdrawals throughout the year.
    I could ask a family member to pay it off using online banking straight away in an email.
    If you're in a wi-fi area overseas you could do it yourself.
  • slhqoue
    slhqoue Posts: 121 Forumite
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    True. Although I might be a bit worried about security. But yes, in principle.

    So the 21.9% rate as opposed to the 12.9% rate seems to make very little difference to me -> I will always pay back the full amount on purchases before incurring interest, and using it to withdraw cash I plan on emailing family or paying it back myself through internet banking within a few days.

    In a worst-case, hypothetical scenario, a £300 cash withdrawal paid back 2 weeks later would mean a fee of £2.52 (0.06% interest a day at 21.9% APR) rather than £1.47 (0.035% interest a day at 12.9% APR) -> so a mere pound worse off.

    (I hope my maths is correct!)
  • zagfles
    zagfles Posts: 20,363 Forumite
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    Couple of things:

    The daily rate is a bit lower, 21.9% APR is a daily rate of 0.0547%

    More importantly - be aware that you can't pay off cash advances made in the current statement period until the entire previous statement balance is paid off.
  • knightstyle
    knightstyle Posts: 7,009 Forumite
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    It is simple to pay the amount withdrawn the same day or ASAP and avoid the interest charges. If you use the card for shopping as well just pay that at the end of the month as usual. Your payments for the cash will pay that first.
    We use our Clarity card exclusively abroad, mostly to withdraw cash and it has not affected our credit rating.
  • zagfles
    zagfles Posts: 20,363 Forumite
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    It is simple to pay the amount withdrawn the same day or ASAP and avoid the interest charges. If you use the card for shopping as well just pay that at the end of the month as usual. Your payments for the cash will pay that first.
    Payments will always go to statemented balances before unstatemented balances. That trumps the rule about payments going to cash advances first.

    For instance if you get a statement on 1st of the month for £1000 of purchases, then make a £200 cash withdrawal on the 2nd, then pay £200 on the 3rd, and pay £1000 on the 25th, you will pay 23 days interest on the £200.

    Because the £200 paid on the 3rd will go towards the statement balance not the cash advance, which won't get paid off till the 25th.
  • Andy7856
    Andy7856 Posts: 248 Forumite
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    Knightstyle is 100% correct, to be blunt the Halifax member who said cash withdraws affect your credit record perhaps sums up why the banking industry is in such the state it is and would be better serving burgers (no offence to those in that industry already!!) Following a recent trip to the USA I simply paid off the off soon as I could, however in many cases you are talking about pennies.. would you really want to get all stressed out on holiday about making payments to your bank card just to save pennies? Using my clarity card abroad saved me about £40 in fees, a few pennies on interest I can handle.
  • slhqoue
    slhqoue Posts: 121 Forumite
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    Payments will always go to statemented balances before unstatemented balances. That trumps the rule about payments going to cash advances first.

    I was told precisely the opposite, that payments always go to cash withdrawals first and other payments second.
  • slhqoue
    slhqoue Posts: 121 Forumite
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    The daily rate is a bit lower, 21.9% APR is a daily rate of 0.0547%

    I'd be really interested to know how you work this out.

    21.9%/365 = 0.06
    12.9%/365 = 0.0353
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