Halifax clarity: how is the interest calculated on withdrawals?

kaloss

I am still not sure how is the interest calculated on withdrawals abroad for the Halifax Clairty.

Let's say that I have a balance of 400£ and then I withdraw the equivalent of 100£ in another country. Then the same day I pay on the card 100£. Is that enough to pay just 1 day of interest or do I need to clear the whole balance to do that? (thus pay 500£ in the card).

thebritishbloke

As cash and purchases are charged at the same rate, I have a feeling they may just split it equally. Better to contact them and double check. In either case, you'd have to wait for the withdrawal to show up in your account which could take a couple of days, and then make the payment.

grumbler

http://www.halifax.co.uk/creditcards/clarity-card/terms/

6. ALLOCATION OF PAYMENTS
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.

Note:

• you don't want any part of your £400 to be a 'due' amount;
• your £100 withdrawal has to appear in your online statement before you pay it off.

Tixy

If the £400 existing balance was before the last statement then any payments will clear that statemented balance before any later transactions.

If the £400 is since the last statement and is all from purchase transactions then your payment will pay off a cash withdrawal before any purchase transactions.

Detailed in the T&Cs here (you may want to check yours are the same)

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.

edit - pah beaten to it

YorkshireBoy

Getting it wrong won't be too costly though, as the interest works out at around 3p per day per £100 of cash balance if you're on the typical 12.9% APR rate.

kaloss

Ok, so as far as I understood the best way is to wait the cash withdrawal to appear among the "Recent transactions" and then pay the exact same amount. This way I would be charged just few days of interest. Is that correct?

grumbler

Correct, but it doesn't have to be "the exact amount". Nothing stops you from paying a little more.

hillcats

I wouldn't worry too much, I withdrew $750 over three weeks and on my return when all transactions where displayed I made a payment of £500 and then only paid £1.80 interest for the cash over three weeks @ 12.9% on next statement. Really not worth the worry compared to the convienence...

zagfles

kaloss wrote: »

Ok, so as far as I understood the best way is to wait the cash withdrawal to appear among the "Recent transactions" and then pay the exact same amount. This way I would be charged just few days of interest. Is that correct?

You need to understand the point made above, that statemented balances are always paid first. This applies even if you have DD to pay the statement in full.

You cannot pay off a cash withdrawal you just made until the previous statement balance has been paid in full.

kaloss

zagfles wrote: »

You need to understand the point made above, that statemented balances are always paid first. This applies even if you have DD to pay the statement in full.

You cannot pay off a cash withdrawal you just made until the previous statement balance has been paid in full.

You are right, I understood now. I need to clear the statement, then my payment will start to pay off all the transactions that are not already in the statement, starting from cash withdrawals (then Purchases, Balance Transfers and Cheques).

So if I have a 400£ statement to be paid and a 100£ withdrawal transaction not yet in the statement I must pay 400£ first and then I can pay the 100£. Clear now

A question is. Let's say I have a direct debit set to pay my balance in full at the payment due date. What happens if I clear my balance before that? Would I still automatically pay the statement balance on the payment due date and thus going in credit?

SnowTiger

kaloss wrote: »

A question is. Let's say I have a direct debit set to pay my balance in full at the payment due date. What happens if I clear my balance before that? Would I still automatically pay the statement balance on the payment due date and thus going in credit?

It takes three working days for a Direct Debit to to processed.

If you make the payment before the DD process begins it won't be taken; otherwise it will be taken and your account will be in credit.

It's one way to pre-load your account without breaking the T&Cs by deliberately putting your account in credit. :rotfl: