Halifax Clarity - minimising interest on cash withdrawal

buffman

I am a little confused about the best way to minimise interest charges on a cash withdrawal. I originally thought that all I would need to do was pay off any cash withdrawal as soon as it hits the account.

Eg. £400 on bill up to May 10th (all regular shop purchases). May 11th cash withdrawl of £100 which hits my account on May 13th. On May 13th I would transfer £100 by faster payments to Halifax and this would go against the cash payment and hence minimise my interest liability.

However I have now been told that in the above scenario, my £100 transfer would go against the £400 regular purchases and not the cash withdrawl. I was told that this was because both the £400 and £100 cash transaction have the same rate of interest and I made the £400 first. (all this happens intra month and the statement (dated May 20) is paid off in full on say May 25). Hence I would need to pay £500 on May 13 to minimise the interest payment.

Is this everyone's understanding.

Thanks

YorkshireBoy

http://www.halifax.co.uk/creditcards/low-rate-no-fee/clarity-card/terms/ (see condition 6.1)


The key phrases are "Transactions that appear on your statement " and "Transactions that have not yet appeared on your statement".


By statement, they mean the official statement, not your recent transactions list within online banking.


In short, if your last statement had a purchases balance you won't be able to avoid interest on the cash advance unless you clear the entire balance (plus a little extra to cover the cash advance interest if you don't make the payment the same day it hits your account).