Long Trip Abroad - Credit Card Strategy

OIKY

Hello.

I am planning to travel across the USA for a number of months next year. I already have enough money saved up for the trip but I am currently considering the best way to pay for certain elements of it.

for example, in the lead up to the trip I will be making many hotel and transport bookings direct from the respective american websites (which will charge in $). For this purpose my plan was to get a credit card such as the Halifax Clarity/Post Office where there is no non sterling transaction fee, use this card to make the purchases and then pay it off instantly.

Now the problem here is lets say I get a credit limit of £1200, The cost of all my hotels/transport will be about 10 times that. Will I have a problem If i use the card to make £1200 worth of purchases, pay it off instantly, and then make another £1200 worth of purchases (and repeat until all purchases are made)?

In my head this seems perfectly reasonable, but realistically am i going to only be able to spend £1200 a month? or wait for the payments to clear before making more purchases? I need experts such as yourself to think of why this won't work

I'm sure i will have amny other questions to ask but i think i'd better start off with the most important, otherwise i'll have to re-strategise!

thanks

InsideInsurance

You can pay it off and then keep spending but you need to remember the time delays between (a) authorising the payment and it hitting the account and (b) you paying and the funds being applied.

When you add the international element to the issue then (a) may become very hard to predict. My stay in a Paris hotel only finally hit my card last week, almost a full month after it was authorised.

In the USA there is scarely a fair number of places that use the old carbon paper/ card imprint method of taking card payments rather than electronic terminals and so when they'll show up is anyones guess.

How much of a problem this is for you will depend on what level of spending you are expecting. If you are going to be burning through £1,200 every few days then this is unlikely to work for you. If you're talking £1,200 for every month or so then you can probably get away with it.

OIKY

InsideInsurance wrote: »

You can pay it off and then keep spending but you need to remember the time delays between (a) authorising the payment and it hitting the account and (b) you paying and the funds being applied.

When you add the international element to the issue then (a) may become very hard to predict. My stay in a Paris hotel only finally hit my card last week, almost a full month after it was authorised.

In the USA there is scarely a fair number of places that use the old carbon paper/ card imprint method of taking card payments rather than electronic terminals and so when they'll show up is anyones guess.

How much of a problem this is for you will depend on what level of spending you are expecting. If you are going to be burning through £1,200 every few days then this is unlikely to work for you. If you're talking £1,200 for every month or so then you can probably get away with it.

And there you go, your reply already made me figure out something simple that I didn't consider. Hotels do not work the same as other payments and they won't all actually charge me at the time of booking. when i wrote my post i was assuming that the balance would appear on my credit card as i booked it online months before travelling.

as you say, i won't be spending that much money that quickly, so if I am getting charged on arrival/departure at the hotel then i probably won't have the problem that I considered I wuld have.

The transport costs will get charged at the time of booking online i guess. but they generally won't be near as much as a hotel room rate. I guess I should be ok then. but i'll have a backup strategy just in case

Nasqueron

May be best applying for a card early then if you get a low limit, spending on it, paying off in full for a year (or at least 6 months) you can chance your arm and ask for a higher limit - better than waiting until last minute and finding a low limit is given

InsideInsurance

OIKY wrote: »

And there you go, your reply already made me figure out something simple that I didn't consider. Hotels do not work the same as other payments and they won't all actually charge me at the time of booking. when i wrote my post i was assuming that the balance would appear on my credit card as i booked it online months before travelling.

as you say, i won't be spending that much money that quickly, so if I am getting charged on arrival/departure at the hotel then i probably won't have the problem that I considered I wuld have.

The transport costs will get charged at the time of booking online i guess. but they generally won't be near as much as a hotel room rate. I guess I should be ok then. but i'll have a backup strategy just in case

Hotels vary, some are prepaid and others are paid at the end. Often you get the option of prepaying for a rate discount but lose cancellation rights. Alternatively you dont pay until you leave the hotel in which case normally retain some level of cancellation rights. Not all offer prepay options or there is such a small difference in price that the not paying until the stay makes more sense.

OIKY

InsideInsurance wrote: »

Hotels vary, some are prepaid and others are paid at the end. Often you get the option of prepaying for a rate discount but lose cancellation rights. Alternatively you dont pay until you leave the hotel in which case normally retain some level of cancellation rights. Not all offer prepay options or there is such a small difference in price that the not paying until the stay makes more sense.

I think in my case, not paying until the stay makes much more sense.

think i'll be ok with my strategy then. cheers

SuperHan

OIKY wrote: »

I think in my case, not paying until the stay makes much more sense.

think i'll be ok with my strategy then. cheers

From looking at a planned USA trip myself, the amount that can be saved by prepaying can be considerable (well, 10% or $30-$50 depending on the hotel). In these cases, it would be cheaper to take a hit on a non-sterling fee and prepay rather than pay extra just to pay on your Clarity at the time of stay.

In fact, paying before you go would be better for you, as you will at least know what is left to come out roughly before you leave for the US. And the chances are you will be booking months in advance, so you will have plenty time to pay off the credit card hotel bills prior to your visit, leaving as much of the £1,200 as possible to spend while you're there.

TBeckett100

I booked a road trip through the west coast. I booked the hotel's through Expedia using quidco 12% cash back and put any USD purchases on the Post Office Platinum which doesn't charge transaction fees on foreign purchases

callum9999

InsideInsurance wrote: »

You can pay it off and then keep spending but you need to remember the time delays between (a) authorising the payment and it hitting the account and (b) you paying and the funds being applied.

When you add the international element to the issue then (a) may become very hard to predict. My stay in a Paris hotel only finally hit my card last week, almost a full month after it was authorised.

In the USA there is scarely a fair number of places that use the old carbon paper/ card imprint method of taking card payments rather than electronic terminals and so when they'll show up is anyones guess.

How much of a problem this is for you will depend on what level of spending you are expecting. If you are going to be burning through £1,200 every few days then this is unlikely to work for you. If you're talking £1,200 for every month or so then you can probably get away with it.

I generally paid it off almost immediately (based on how much the available balance had gone down) and never had an issue. Would they really treat that the same as someone pre-loading the card?

OIKY

SuperHan wrote: »

From looking at a planned USA trip myself, the amount that can be saved by prepaying can be considerable (well, 10% or $30-$50 depending on the hotel). In these cases, it would be cheaper to take a hit on a non-sterling fee and prepay rather than pay extra just to pay on your Clarity at the time of stay.

In fact, paying before you go would be better for you, as you will at least know what is left to come out roughly before you leave for the US. And the chances are you will be booking months in advance, so you will have plenty time to pay off the credit card hotel bills prior to your visit, leaving as much of the £1,200 as possible to spend while you're there.

yep, it's a good point, I did have a look and there is a considerable difference for paying in advance. and you're right i will have plenty of time so i'll be able to say, pay for 10 hotels, pay it off, book the next 10 hotels, pay that off etc. I guess my original question was wondering if the Credit Card Provider would get annoyed at that strategy, as technically they would never be earning anythnig from me as i keep paying things off instantly.

TBeckett100 wrote: »

I booked a road trip through the west coast. I booked the hotel's through Expedia using quidco 12% cash back and put any USD purchases on the Post Office Platinum which doesn't charge transaction fees on foreign purchases

that's the reason i wanted to use a card like the clarity in the first place, I don't trust sites like expedia to put the sale through in sterling so i'd rather use a card with no foreign transaction fee to be safe.

I have a good credit rating but for some reason i'm not eligible for the post office credit card (i checked using the MSE tool) and Halifax wont let me have a clarity until april (new rule of not allowing a new card until 6 months after the last one with them was closed) so i am considering the lloyds avios card or the aqua card.

it doesn't matter which one really as long as it has a no foreign transaction fee. I guess the clarity would have been better in an emergency because i could have used it to withdraw cash in the US for no charge also. maybe i'll phone Halifax up, i really can't see them not wanting to give someone credit.

already well in on quidco. I wonder if they have some fair use policy? 3 dozen hotels at £100 a pop with 12% cashback will be a nice little bonus for me i think

InsideInsurance

callum9999 wrote: »

I generally paid it off almost immediately (based on how much the available balance had gone down) and never had an issue. Would they really treat that the same as someone pre-loading the card?

Guess that depends on if the payment ends up giving you a positive balance.

If its an electronic payment to the merchant then they may know its coming - though not necessarily for a variety of reasons - but if its a carbon paper swipe then they've no clue that a charge for $750 is coming they just see you making a £500 payment putting yourself £400 into a positive balance which normally breaches the rules.