Bought foreign currency - now panicking :(

FOXGLOVE_2

So I'm going to Germany next month and had put aside some money to buy Euros with before I go. Me and OH get paid a few weeks apart so she said she'd give me her half when she got paid.

So I used my Capital One credit card at Thomas Cook and planned to pay off the total £606 when she gave me her half and make a payment to the credit card account using my debit card. As I normally do with purchases.

Now in a panic as I've realised they class this as a cash advance and I have already had an £18 fee show up on my statement. Having read up more about it, I'm expecting to see a massive interest charge for this at the end of the month. I'm struggling to find out how much I will be charged but understand that I will be charged from the date of the transaction until "the transaction amount has been paid in full".

Thing is, I already had a £500 balance on the card. I made a payment of £630 to my account today. So does that mean they recognise the £630 paid as paying off the cash advance or will it be seen as paying off my purchases made previously? Or... does it mean my whole balance has to be cleared?

I'm so angry with myself. I had the money in my bank and should have just waited for OH and bought Euros in cash. Dreading to think how much a £600 cash advance will cost me in interest.

Tixy

Payments made to the account are allocated against the most expensive balance first - which is almost certainly the cash advance. However some cards will always allocated payments against a previous statement before transactions made since the last statement, I don't know whether capital one does but your T&Cs will clarify.
So possibly you have paid around £130 off the £600 so far, or possibly you have repaid it all already.

Your statement should tell you the interest rate for cash advances.

But overall cost may not be as much as you are dreading. As a quick example if the APR was 30% and the balance was outstanding for a month and a half then you'd only be looking at around £22 interest on top of the charges you incurred.

pooch

FOXGLOVE wrote: »

So I'm going to Germany next month and had put aside some money to buy Euros with before I go. Me and OH get paid a few weeks apart so she said she'd give me her half when she got paid.

So I used my Capital One credit card at Thomas Cook and planned to pay off the total £606 when she gave me her half and make a payment to the credit card account using my debit card. As I normally do with purchases.

Now in a panic as I've realised they class this as a cash advance and I have already had an £18 fee show up on my statement. Having read up more about it, I'm expecting to see a massive interest charge for this at the end of the month. I'm struggling to find out how much I will be charged but understand that I will be charged from the date of the transaction until "the transaction amount has been paid in full".

Thing is, I already had a £500 balance on the card. I made a payment of £630 to my account today. So does that mean they recognise the £630 paid as paying off the cash advance or will it be seen as paying off my purchases made previously? Or... does it mean my whole balance has to be cleared?

I'm so angry with myself. I had the money in my bank and should have just waited for OH and bought Euros in cash. Dreading to think how much a £600 cash advance will cost me in interest.

Pay what you can to the credit card company now (e.g. by using the money you've set aside to minimise interest.)
Then when your partner gets paid pay the remainder.

How much interest you get charged will depend on your interest rate and how quickly you pay. But, as a worst case example, even if you leave off paying for a whole month, and you you have a whopping 50% interest rate, the interest will only be about £25.

grumbler

FOXGLOVE wrote: »

Now in a panic as I've realised they class this as a cash advance and I have already had an £18 fee show up on my statement. Having read up more about it, I'm expecting to see a massive interest charge for this at the end of the month. I'm struggling to find out how much I will be charged but understand that I will be charged from the date of the transaction until "the transaction amount has been paid in full".

Correct. The interest rate can be found on your statements or in the Summary Box for your card.

Thing is, I already had a £500 balance on the card. I made a payment of £630 to my account today. So does that mean they recognise the £630 paid as paying off the cash advance or will it be seen as paying off my purchases made previously?

It has to be the former.

I'm so angry with myself. I had the money in my bank and should have just waited for OH and bought Euros in cash. Dreading to think how much a £600 cash advance will cost me in interest.

Or, possibly, you just could have used your card for paying abroad. I don't think it would me more expensive than buying currency from Thomas Cook. BTW, some C1 cards (Aspire World and Classic Extra) don't charge 2.75% for currency exchange. Neither do some other credit and debit cards:

• Cheap Travel Cards

Also, when buying currency in UK there are cheaper places then Thomas Cook:

• TravelMoneyMax.com Find the cheapest online holiday cash

Game_Over

grumbler wrote: »

Thing is, I already had a £500 balance on the card. I made a payment of £630 to my account today. So does that mean they recognise the £630 paid as paying off the cash advance or will it be seen as paying off my purchases made previously?

It has to be the former.

According to my capital one account (but as another poster says, it can differ so OP should check their own terms) it says:

Unless you pay the outstanding balance in full, we will allocate your payments to balanceswhich attract the hgighest interest rate first. We will always allocate your payments to pay any amounts which have already appeared on a statement before allocating your payments to any amounts subsequently applied to your account.

If you think about it, it has to be that way really.

Take an example that you have £500 purchases on a credit card which you receive a statement for. Before paying, you elect to withdraw £10 from an ATM.

You then elect to pay just the minimum payment by the date due, which may be £10. (assuming it's 2% of outstanding balance)

Would that £10 go towards the cash advance, meaning you have failed to pay the minimum payment by the date specified, resulting in default charges being applied? I think not.

FOXGLOVE_2

Phew, thanks for info and advice everyone. I made a payment of £630 this morning after realising so hopefully that will stop any interest being charged after today.

Oh and the Thomas Cook rate was an online thing that I reserved and picked up instore, using the tool on MSE. Not been overseas in over 10 years so was wary about using the top rates on the TravelMoneyMax thing as it was online only exchanges and would rather have the money in my hand so went for a name I knew of with a decent rate.

This sorry tale has given me a bit of a kick up the bum to clear of the rest of the balance.

FOXGLOVE_2

Game_Over wrote: »

According to my capital one account (but as another poster says, it can differ so OP should check their own terms) it says:




If you think about it, it has to be that way really.

Take an example that you have £500 purchases on a credit card which you receive a statement for. Before paying, you elect to withdraw £10 from an ATM.

You then elect to pay just the minimum payment by the date due, which may be £10. (assuming it's 2% of outstanding balance)

Would that £10 go towards the cash advance, meaning you have failed to pay the minimum payment by the date specified, resulting in default charges being applied? I think not.

Hang on...

So the money I paid this morning is paying off the previous purchases? And my next statement will be looking for me to pay off this cash advance thing otherwise the interest piles up?

God, this just gets worse. Looks like I'm now gonna have to pay the entire balance and somehow find another £600 to do so next month??!?

Tixy

If your terms are like Game-Over's (which they probably are) then yes your payment will have only paid off £130 of the £600 cash advance. Interest is accrued daily so pay as much as you can afford to the account as soon as you can to minimise the interest charged.

If you cannot afford to repay off the remaining debt, then possibly consider reusing the credit card for any purchases you need to make this month that you would normally pay by debit card, and then use money saved from that to pay more off the credit card.

Game_Over

FOXGLOVE wrote: »

Hang on...

So the money I paid this morning is paying off the previous purchases? And my next statement will be looking for me to pay off this cash advance thing otherwise the interest piles up?

God, this just gets worse. Looks like I'm now gonna have to pay the entire balance and somehow find another £600 to do so next month??!?

Yes, that's right.

You paid off the last bill in full. (with a bit left over to cover some of the new transaction)
You had plans to pay this bill in full, I thought. Only mistake you made was you actually carried out a cash advance transaction rather than a purchase, and so no interest period applies.

You don't have to wait for a new statement to make the next payment or payments, hence my previous advice

callum9999

FOXGLOVE wrote: »

Hang on...

So the money I paid this morning is paying off the previous purchases? And my next statement will be looking for me to pay off this cash advance thing otherwise the interest piles up?

God, this just gets worse. Looks like I'm now gonna have to pay the entire balance and somehow find another £600 to do so next month??!?

That depends on what you've spent. If you have received a previous statement and not yet paid it off, then your payment would have done so. If your last statement has already been paid, then this money will all go towards the cash advance - regardless of any other purchases you may have made.

Though as other people have said, the interest isn't that much in the grand scheme of things, so there's no need to panic over it!

callum9999

grumbler wrote: »

Also, when buying currency in UK there are cheaper places then Thomas Cook

I invariably find that if you want cash from a physical location and don't live in London, Thomas Cook have the best rates.

As I only get small amounts to cover my bus to the hotel etc. in the event of ATMs not working, that's always the best choice for me. I'd understand why people would be weary about ordering it online as well.