surprise credit card charge

bina72

Hi All,

I'm new to this site so this may well have been answered already, if so could someone point me in the right direction please?

I recently bought £1000 of US dollars through travelex. I used my HSBC credit card to do so. Travelex did not charge me a transaction fee. However, when I checked my acount online my bank had applied a £25 'money handling fee'. Can anyone tell me what this is? I didn't buy in dollars. As far as I am concerned I made a straight forward transaction. How is this classed as a different transaction? Could I claim it back - it certainly out a dent in the great exchange rate I got!
Yours confused...

ThankYouAndEnjoy!

Hello

Travelex will come through as a 'cash transaction'. As a result, the Bank imposes a fee for this type of card usage.

The charge will be confirmed in your Terms & Conditions

You will also be charged the £1000 at a cash interest rate.

greytroot

You basically have taken cash from your account and looks like your bank charges 2.5% for that.

bina72

Crikey what have I done! If I pay the balance in full will I still be charged more?

exel1966

In effect you have withdrawn cash from the card, whether it be in a foreign currency or not. I'm afraid to say you will have been paying interest on this aswell, at a faily exhorbitant rate ((prob around 23-25%)) from the day the transaction was completed and until it's repaid. Paying off the balance in full will not alleviate the interest charges already gained.

If possible, immediately repay this to limit your losses, and try and fund the trip another way otherwise it's going to cost a hell of a lot more than you've already bargained for.

No, you cannot claim this charge back as it is NOT a penalty charge, but an operating charge to use the service. I'm afraid it will form part of the T&C's you agreed to when opening the account.

Remember NEVER EVER withdraw cash from a credit card !!

Voyager2002

bina72 wrote: »

Crikey what have I done! If I pay the balance in full will I still be charged more?

It depends on your terms and conditions, but usually there is no interest-free period for a cash advance, so you will pay interest for the entire period from taking the money up to when you pay the amount in question. A typical interest rate would be 2.5 per cent per month, so you would be looking at another 25 pounds if you pay the money a month after getting the dollars.

I do suggest you call your credit card company and clarify the situation. You may want to repay as soon as possible to stop further interest charges, so remember that interest will also be charged on the interest that you already owe. To avoid this effect keeping you having to pay more and more over the next few months, ask them for a "settlement figure". This is an amount of money including all the interest, and if you pay this amount no further charges will be added.

exel1966

Voyager2002 wrote: »

To avoid this effect keeping you having to pay more and more over the next few months, ask them for a "settlement figure". This is an amount of money including all the interest, and if you pay this amount no further charges will be added.

DON'T even entertain this idea if you want to continue to have a good relationship with the HSBC and any other creditors you have or may want in the future. You will in effect be announcing, via your credit file that you cannot repay your borrowing in full.

bina72

Thanks for all your quick responses. Can't believe I've been so stupid! Ah well I suppose I'll never do it again.
I've shifted some money around so it should lessen the impact next month...

exel1966

Now you've found MSE you'll learn from your error, just as I and many others have done when we've been caught out unexpectedly.

ThankYouAndEnjoy!

Just so you are aware, on the day you make full payment this will NOT totally clear the account.

The reason for this is that interest is charged on a cash transaction on a daily basis, therefor by the time the payment is received and credited to the account, the account balance will have increased.

You may therefor want to make the full payment + £X (say £2) to be safe, otherwise you will accrue more interest.

exel1966

That's a good point and well worth taking that advice. Might be adviseable to check that HSBC will not charge you for being in credit as it has been known by the odd card provider.