We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Unexpected problem with the Halifax Clarity Card
Sealegs
Posts: 1 Newbie
in Credit cards
As a frequent traveller with my work I took the advice of getting a Halifax Clarity card for making purchases and drawing money while abroad. I also set up a direct debit payment with them so any debt would get paid off in full every month. (Or at least that's what is supposed to happen!)
However... when you draw cash out while abroad with your Halifax Clarity Card you are charged interest on the withdrawn amount every day. In theory this is ok... your bill arrives the interest is listed on your statement showing what's owed and you know it'll all get paid off by the direct debit you set up to pay off your bill in full every month. Once that's done your debt with them goes back to zero, right? Wrong!!!
Between the statement being issued and the bill being paid the daily interest on the cash withdrawal is still being added to what you owe. However when the payment date comes Halifax doesn't use the direct debit that you set up to clear all the owed monies at that point... it just takes as payment what was on the last statement. As there will always be a gap between the date your statement is issued and the date they take their payment you can never pay off the full amount from the direct debit that you set up specifically to pay off what you owe in full every month. There will always be days between the issue of the statement and the date of the payment and in these extra days interest added onto the next months bill. The amount you owe will get smaller but will always, and continue, to accrue.
The only reason I got the Clarity card was for getting money out while abroad! It's turning out to be way more trouble than it's worth though. I just thought Clarity Card holders might want to know this info as it wasn't made clear to me that setting up a direct debit to clear your account every month doesn't actually necessarily do that.
Additionally concerning to me was that the customer service rep from the Halifax told me I should never use my Clarity card to daw out cash while abroad as it will adversely affect my credit score/rating! Between this and the fact that you can't seem to easily pay off the interest I have decided to ditch my Clarity Card.
Thought others might want to know.
However... when you draw cash out while abroad with your Halifax Clarity Card you are charged interest on the withdrawn amount every day. In theory this is ok... your bill arrives the interest is listed on your statement showing what's owed and you know it'll all get paid off by the direct debit you set up to pay off your bill in full every month. Once that's done your debt with them goes back to zero, right? Wrong!!!
Between the statement being issued and the bill being paid the daily interest on the cash withdrawal is still being added to what you owe. However when the payment date comes Halifax doesn't use the direct debit that you set up to clear all the owed monies at that point... it just takes as payment what was on the last statement. As there will always be a gap between the date your statement is issued and the date they take their payment you can never pay off the full amount from the direct debit that you set up specifically to pay off what you owe in full every month. There will always be days between the issue of the statement and the date of the payment and in these extra days interest added onto the next months bill. The amount you owe will get smaller but will always, and continue, to accrue.
The only reason I got the Clarity card was for getting money out while abroad! It's turning out to be way more trouble than it's worth though. I just thought Clarity Card holders might want to know this info as it wasn't made clear to me that setting up a direct debit to clear your account every month doesn't actually necessarily do that.
Additionally concerning to me was that the customer service rep from the Halifax told me I should never use my Clarity card to daw out cash while abroad as it will adversely affect my credit score/rating! Between this and the fact that you can't seem to easily pay off the interest I have decided to ditch my Clarity Card.
Thought others might want to know.
0
Comments
-
Most Clarity card users, when they make an overseas cash withdrawal, pay it off at the earliest opportunity, even while still abroad by internet banking. There's no need to await the DD, and the earlier you clear it the less daily interest accrues. As for such withdrawals affecting your credit rating, I doubt there's any significant effect. A 'frequent traveller' would be unwise to ditch such a useful card, even if used only as a backup.Evolution, not revolution0
-
Very unfortunate. Seems like there the Direct Debit Setup is not fool-proof. Did they update the daily interest accrued on the balance online? If not how would you know what's the exact sum owed as it is going to re-calculated daily? I guess the other way is to over pay.
Save 12K in 2020 # 38 £0/£20,0000 -
Everything you have complained about above is correct and normal. Of course on the direct debit due date they take the previous statement balance and not the current balance on the date of the direct debit. There is no UK issued credit card or charge card in existence which does things any differently. Same applies to the interest.
Your whole complaint lacks any merit whatsoever.
As to the effect that withdrawing cash abroad on this card would have on your credit score, it would be the same as withdrawing cash on any other credit card.
Just out of curiosity, after you 'ditch it' what are you going to replace it with?0 -
OP this is easily avoided, by simply removing the direct debit, and paying off the money on your return. Rates charged in clarity are between 1 &2 % per month, but you avoid the 3% typical loading for using overseas plus the individual charges for each withdrawal which can be £2-£3.
Taking out say £200 on a. Clarity card will be circa £5 cheaper than using almost all other forms of withdrawal. Even with trailing interest then by the second month the amount of interest charged will be fractions of a percent.
The other alternative if this is a problem is just to use clarity for purchases and get a fee free debit card from another current account, metro bank, n&p or nationwide flex plus spring to mind.0 -
Well this is not the problem with Halifax, because all of the creditcards work like this. So it is always be the case that:
1. They will charge interest starting from the day you withdraw cash
2. They will take the payment on the last statement they send you.
3. All of other transactions after the last statement e.g. purchases, cash withdrawals will accumulate and you will pay them in the next statement month, That is why it is called creditcard, not debitcard.
Most people who use claritycard to withdraw cash already know that they will need to clear the cash withdrawal asap or when they back home at the latest. By this way they will not pay interest or only pay the interest for a few days.
If you do not want to keep your eye on the cash withdrawal clearance when traveling abroad, use zero fee for foreign transaction debit cards such as from Metro, N&P, Santander Zero or Cumberland debitcard.
Alternatively use specialist prepaid creditcards such as revolut, or specialist creditcard which tag the cash withdrawal abroad as a purchase such as Travelex supercard.As a frequent traveller with my work I took the advice of getting a Halifax Clarity card for making purchases and drawing money while abroad. I also set up a direct debit payment with them so any debt would get paid off in full every month. (Or at least that's what is supposed to happen!)
However... when you draw cash out while abroad with your Halifax Clarity Card you are charged interest on the withdrawn amount every day. In theory this is ok... your bill arrives the interest is listed on your statement showing what's owed and you know it'll all get paid off by the direct debit you set up to pay off your bill in full every month. Once that's done your debt with them goes back to zero, right? Wrong!!!
Between the statement being issued and the bill being paid the daily interest on the cash withdrawal is still being added to what you owe. However when the payment date comes Halifax doesn't use the direct debit that you set up to clear all the owed monies at that point... it just takes as payment what was on the last statement. As there will always be a gap between the date your statement is issued and the date they take their payment you can never pay off the full amount from the direct debit that you set up specifically to pay off what you owe in full every month. There will always be days between the issue of the statement and the date of the payment and in these extra days interest added onto the next months bill. The amount you owe will get smaller but will always, and continue, to accrue.
The only reason I got the Clarity card was for getting money out while abroad! It's turning out to be way more trouble than it's worth though. I just thought Clarity Card holders might want to know this info as it wasn't made clear to me that setting up a direct debit to clear your account every month doesn't actually necessarily do that.
Additionally concerning to me was that the customer service rep from the Halifax told me I should never use my Clarity card to daw out cash while abroad as it will adversely affect my credit score/rating! Between this and the fact that you can't seem to easily pay off the interest I have decided to ditch my Clarity Card.
Thought others might want to know.0 -
We've discussed this so many times.
The simple way to use the Clarity is to not have a DD. For a short holiday abroad (ie less than 3 weeks or so), go abroad, spend on it, make ATM withdrawals, check the balance online when you get back and pay the whole lot off. Simple.
That way you'll pay a trivial amount of interest. Far less than the mugs who go the post office or UK high street to get their "commission free" foreign currency pay in exchange rate markup.
The more complicated way is to try to minimise cash withdrawal interest while still taking advantage of the interest free period on purchases. You can do that by paying off individual cash withdrawals as soon as they hit the account, but you cannot pay off cash withdrawals in the current statement period until the previous statement balance is cleared in full.
So if you have an outstanding balance on a statement, you need to pay that off before paying off any cash withdrawals made since the statement.
That's the problem with a DD. People think that'll take care of the purchases and they can pay cash withdrawals off straight away. Wrong.
If you get a statement on the 1st of the month with a £500 balance and you make a £100 cash withdrawal on the 2nd, pay £100 on the 3rd, they think that £100 will pay off the cash withdrawal. It won't. It will go towards the statement balance, even if they have a DD to pay the statement balance in full.0 -
or just don't with-draw cash from the Clarity card.
then dd's are ok0 -
The more complicated way is to try to minimise cash withdrawal interest while still taking advantage of the interest free period on purchases. You can do that by paying off individual cash withdrawals as soon as they hit the account, but you cannot pay off cash withdrawals in the current statement period until the previous statement balance is cleared in full.
.
i.e. Make sure the balance on the card is 'zero' before travelling to make monitoring the overseas spendings easier.
Save 12K in 2020 # 38 £0/£20,0000 -
Most Clarity card users, when they make an overseas cash withdrawal, pay it off at the earliest opportunity, even while still abroad by internet banking. There's no need to await the DD, and the earlier you clear it the less daily interest accrues.
Correct, and I actually pay it off the very same day I take out the money, why do I need to pay interest even for 1 day?!As for such withdrawals affecting your credit rating, I doubt there's any significant effect.
I made lots of withdrawals already using the Halifax Clarity and my credit score is quite good, so I don't think it's affecting your score.A 'frequent traveller' would be unwise to ditch such a useful card, even if used only as a backup.
I agree.
And I also recommend anyone who travels the US to consider the MBNA card because it has the best FX rate for GBP-USD, I made a topic about it here:
https://forums.moneysavingexpert.com/discussion/comment/69455273#Comment_694552730 -
If you do not want to keep your eye on the cash withdrawal clearance when traveling abroad, use zero fee for foreign transaction debit cards such as from Metro, N&P, Santander Zero or Cumberland debitcard.
Oh... very useful info ... never heard of "Cumberland" before, is it a good bank?0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.5K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.5K Work, Benefits & Business
- 601.4K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards