Halifax Clarity Credit Card cash withdrawals

broadmarsh

I have been using this card for many years in supermarkets all round the world when I am on self catering holidays in condominiums. I have a direct debit set up with my bank to pay the outstanding balance at the end of every month. Therefore, I have not paid any interest charges and always benefit from the excellent rates shown in the MasterCard Currency tool.

On some occasions I have not had my travellers cheques with me and have then used an ATM. Naturally I have paid interest on the money withdrawn, but the cost has not been high because of the timing of the withdrawal and the paying of the outstanding balance by direct debit.

In two of my upcoming vacations, I intend to use the card more for cash withdrawals but I am thinking that I can get away with paying no or very little interest charges.

Because I am set up with internet banking I am going to withdraw cash from an ATM in the country's local currency (the default) and as soon as I see it appear in my Halifax Clarity account in UK currency, I am going to pay that exact amount off the credit card thereby reducing the interest charged on that money.

Having said the above I think there might be one fly in the ointment. If I have already got £400 in purchases from shops/supermarkets, and then I withdraw say XXXX in local currency that also appears in the credit card account as £400, if I then transfer £400 from my bank account to the card account, will the CC company take it as having paid off the shops/supermarket purchases or will it be used to pay off the cash ATM withdrawal?

If the money I have transferred across is used solely to pay off the shops/supermarkets purchases then I will still get stung for interest charges that will accrue between the withdrawal date and the balance payment date on the £400 ATM cash withdrawals.

Has anyone any experience of this type of withdrawal and subsequent payment?

Perhaps the best option is to pay off the money spent at the shops/supermarkets and the cash withdrawal at the same time. In this instance £800.

I hope I have explained this sufficiently.

Thanks

m00se1986

The transactions attracting the highest interest is always paid first, but section 6.1 of the Terms & Conditions will confirm for you that cash withdrawals will also be paid off first if you have different types of transactions on your account at the same interest rate (i.e. if you hadn't paid your previous statement fully and were not benefiting from the interest-free period).

ManAtHome

Link to T&Cs here http://www.halifax.co.uk/creditcards/low-rate-no-fee/clarity-card/terms/

Welcome to MSE by the way.

broadmarsh

Thanks to both of you. Doh!! I now know where to look before posting.......It completely answers my question.

6.1 We use any payments you make to pay off Transactions that appear on your statement starting with those on which we charge the highest rate of interest, and so on down to the lowest rate of interest. If the payment is not enough to pay off all Transactions at a particular interest rate, we will pay off Transactions charged at that interest rate in the following order:- Cash Withdrawals, Purchases, Balance Transfers and Cheques, followed by the charges in conditions 7.1, 7.2 and 7.3. If you pay more than the amount due shown on your statement, we will use any remaining payment to pay off Transactions that have not yet appeared on your statement in the same order as those that do appear on your statement. In this condition, "Transaction" includes the amount of the Purchase, Cash Withdrawal, Cheque or Balance Transfer plus any interest, charges or insurance payment charged as a result of that Transaction.

Wammer

The key thing here is whether the purchases have actually been statemented or are just showing online. If a statement has been produced, any payment with go towards anything on there first, then it will pay your new cash withdrawals, then purchases.

ManAtHome

broadmarsh wrote: »

Thanks to both of you. Doh!! I now know where to look before posting...

Not a problem - the summary just states (something like) we apply payments to the highest interest rate stuff first - bit of a bu$$er when they charge the same rate for everything!

broadmarsh

ManAtHome wrote: »

Not a problem - the summary just states (something like) we apply payments to the highest interest rate stuff first - bit of a bu$$er when they charge the same rate for everything!

Yes.... but in the situation I am quoting in my original post they do not charge the same rate. Remember, I am using the card in shops/supermarkets and there is no interest rate charged.

The other situation for me is for drawing cash from ATMs and this is charged at a daily rate of 1.29%. These are the transactions that I will be paying off midterm to ensure I am not going to get caught for high interest charges.

There will be no other rate appearing on the card, because I have a direct debit set up to clear the outstanding balance every month.

Thanks again anyway.

matty_544

Correct me if im wrong i might be muddled up with another cc but isnt purchases technically charged interest from the moment they appear on the statement. The interest is waived if the purchase amount is paid off by the due date.

When i wanted to pay off my foreign cash withdrawals to avoid interest, i usually paid the full amount to clear all balances from my card. i did this to make sure the money i paid through manual payment did not pay for the x amount for purchases that were earlier in the statement, as previously mention, all rates of APR are the same, instead of it paying for the cash advance.

zerog

matty_544 wrote: »

Correct me if im wrong i might be muddled up with another cc but isnt purchases technically charged interest from the moment they appear on the statement. The interest is waived if the purchase amount is paid off by the due date.

When i wanted to pay off my foreign cash withdrawals to avoid interest, i usually paid the full amount to clear all balances from my card. i did this to make sure the money i paid through manual payment did not pay for the x amount for purchases that were earlier in the statement, as previously mention, all rates of APR are the same, instead of it paying for the cash advance.

You are correct, best not to make any purchases if withdrawing cash, otherwise if you want to pay off a cash withdrawal you must also pay off any previous statements in full at the same time.

broadmarsh

matty_544 wrote: »

Correct me if im wrong i might be muddled up with another cc but isnt purchases technically charged interest from the moment they appear on the statement. The interest is waived if the purchase amount is paid off by the due date.

When i wanted to pay off my foreign cash withdrawals to avoid interest, i usually paid the full amount to clear all balances from my card. i did this to make sure the money i paid through manual payment did not pay for the x amount for purchases that were earlier in the statement, as previously mention, all rates of APR are the same, instead of it paying for the cash advance.

zerog wrote: »

You are correct, best not to make any purchases if withdrawing cash, otherwise if you want to pay off a cash withdrawal you must also pay off any previous statements in full at the same time.

OK. If that is true, isn't this interest lower than the daily interest of 1.29% charged on the cash, or is it the same.

If the same then I am back to my end statement of my original post.........

broadmarsh wrote: »

Perhaps the best option is to pay off the money spent at the shops/supermarkets and the cash withdrawal at the same time. In this instance £800.

Thanks

YorkshireBoy

broadmarsh wrote: »

OK. If that is true, isn't this interest lower than the daily interest of 1.29% charged on the cash, or is it the same.

That's twice you've mentioned daily interest of 1.29%

How are you arriving at that figure?...because according to my maths*, and with a representative APR of 12.9%, the daily rate is 0.03342% (so 3p per £100 per day).

* Annual non-compounded rate / 365