Halifax Clarity Card

sharsky53

After looking at the MSE for using credit cards for foreign currency I advised my daughter to get one for her 18 month world trip. I told her it has such a low interest rate you have no worries. MSE advised 12.9%. When she got her card it was 21.9% because it is tiered depending upon credit limit. MSE should make this a little clearer. Has anybody else come across this?

phona

I assume you mean the cheap travel money page: http://www.moneysavingexpert.com/travel/cheap-travel-money#halifax

In my opinion it's quite clear:

Some poorer credit scorers will get higher APRs, of up to 21.9%

In general the advice on MSE is good but it should only be used to point you in the right direction. You need to read everything you can about any product you're considering applying for, and certainly you (or in this case your daughter) should read the terms and conditions before you submit your application.

Halifax have to reasonably expect more than half of applicants to get the advertised rate, but that leaves a big group who get some other rate. This is normal practice.

Your daughter can still use the card abroad, and still take advantage of the low fees and favourable exchange rates. If possible she could reduce her interest bill by paying the card back as soon as possible after withdrawing money. There's no need to wait for a statement.

The_Boss

MSE seem to have made it very clear then.

Sharsky - in case you haven't considered it, suggest your daughter sets up a direct debit to pay at least the minimum repayment. That way no risk of late/missed payment markers in her credit file when she comes back.

grumbler

sharsky53 wrote: »

After looking at the MSE for using credit cards for foreign currency I advised my daughter to get one for her 18 month world trip. I told her it has such a low interest rate you have no worries. MSE advised 12.9%. When she got her card it was 21.9%

For 18 months even 12.9% is something to worry about.
If the balance is paid in full and card isn't used for withdrawals, the APR is irrelevant.
If it is used for withdrawals, just make a few extra payments to the CC during a billing month. You can help your daughter by keeping your eye on the online statements and making extra payments.

KingL

Do you have to tell Halifax that you are going abroad, like you do with some banks ? I've had my Clarity card for years and vaugely remember that Halifax don't want/need you to tell them if you are going to use it abroad. Now that Metro is dead, I'm gonna have to start using it!

[Deleted User]

KingL wrote: »

Do you have to tell Halifax that you are going abroad, like you do with some banks ?

No, but it's a good idea.

lisyloo

I always give them a call and the Halifax employees I've spoken to would encourage it.
There are no guarantees but if there is a note on your file saying you are visiting X from Y to Z then I would have thought there is less chance of your card being stopped.

cautiousjon

I have a Halifax Clarity card. Other banks (like Lloyds) has said to me that I have what they consider to be a very good credit record. Despite this, I still got a 21.9% APR when I applied for my Halifax Clarity card a few years ago. However, as others have suggested, it makes no difference to me as I always pay off the balance when it's due so I never accrue interest.

I would hope that your daughter has the money already saved up for this trip, and if that is the case, she won't need to care about the interest rate if she sets up a Direct Debit to pay back the statement balance in full.

Regshoe

cautiousjon wrote: »

I would hope that your daughter has the money already saved up for this trip, and if that is the case, she won't need to care about the interest rate if she sets up a Direct Debit to pay back the statement balance in full.

Actually she will, sort of. I have a Clarity card myself, the point of them is that you use them not only for card payments, but also for withdrawing cash. Withdrawing cash will start accruing interest immediately rather than after your statement + a few days.

So even if you pay off the card in full by DD you will be charged interest. The reason this is worthwhile is that the Clarity card tend to have a near perfect exchange rate and no transaction fees, as such the interest is far less than you would pay on say a debit card/pre-pay card where you weren't paying interest, but had worse exchange rates / transaction charges / load fees.

As phona pointed out you can repay what you owe before the statement and stop the interest accruing, you could in theory pre-pay, though I believe this is against the T&Cs. I paid off mine as soon as I came back from travelling, I forget what rate I got, but it wasn't the best, but by paying off early I paid no more than a pound or two in interest on something like £300-400+ of cash withdrawls.

Gloomendoom

I use Halifax Clarity for cash while travelling and, so far, it has only let me down once.

Even if you pay the card off in full at the due date you will pay interest on cash withdrawals. This can be minimised by paying off any amount you withdraw as soon as possible. I recently spent over a month away and paid less than a pound in interest despite using the Clarity for all cash withdrawals and purchases (nearly £2k.) Note that cash withdrawals have to be from an ATM to be fee free.

I would also recommend that she takes other debit and credit cards with her, even if they are expensive to use. Expensive cash is better than no cash at all. Just relying on one card is really not a good idea.

sharsky53

Thanks for all your replies. Yes she has set up a DD to pay off the full balance each month and I have access to the account so that I can monitor it. For paying off the balance ahead of statement date she cannot do this on-line by transfer as her co-op bank does not have the facility to enter a reference and this is mandatory because you have to put the card number as a reference. I can do it for her as Santander have this facility. I was thinking of pre-loading the card so that she does not incur any interest but someone stated this is not allowed as outlined in the T&C's. I will have to look or just ask them I guess. I am not knocking the card, it is extremely convenient in terms of exchange rate and no load fees whatsoever. In fact I just got one myself to replace my Saga card as this does charge ATM fees.