Withdrawing cash with a credit card

grumbler

Many people, myself included, pay cash withdrawals off as soon as they can (without jumping through hoops). I don't see anything wrong with this and don't think this is an obsession.

jennifernil wrote: »

The interest will be tiny compared to your other costs!

IMO this logic is flawed. Indeed, it might be tiny, but it's the amount that matters and the efforts required to save it - regardless of any "other costs" that are absolutely irrelevant.

jennifernil

Well. if you want to do that, that's fine, but at least you seem to understand how to do it correctly, unlike the OP.

I really cannot see why anyone would want to stress over saving even a couple of pounds on, say, a 2 week holiday.

£10 interest over 4 months is about 8.5p per day. A stress free trip is worth far more than that to us.

Plus, in those 4 months, Halifax have paid us £140 for banking with them and having their CCs, so I don't begrudge them the £10.

Ben8282

You will need to pay the full balance of your last statement in full before any payments are allocated to transactions not yet shown on the statement.
So if the full balance on your last statement was £400 then you would need to pay £400 before any payments were allocated to transactions not yet shown on the statement.
However, if the full balance on your last statement was £200 and the other £200 on the card was debited to the account after the statement was issued, you would only need to pay £200 and not the full £400.
As payments are allocated in a specific order, any payments you make above the amount of the full balance of your last statement will be applied first to the cash withdrawals.
I hope this makes things clear.


I am assuming that when you mentioned withdrawing £100 this was just an example figure and in reality you expect to withdraw more,


Although cash withdrawals on a credit card are generally seen negatively, it is all relative to your financial situation as a whole. If you have high debt levels, are constantly overdrawn, make only minimum payments and keep withdrawing cash from credit cards, it will be assumed (probably correctly) that the cash withdrawals are being made so that you can use the money to make the minimum payments on your other debts and the cash withdrawals will therefore be seen very negatively. The negative effect will diminish proportionately according to how distant your financial situation is to that described above, ultimately having no negative effect whatsoever.


If you have a specialist card such as the Clarity card (or perhaps any card for that matter), I can't see that the card issuer would view the withdrawals negatively especially where it was obvious that you were on holiday/travelling and they were repaid in full by the payment due date of the next statement on a card that I am assuming is regularly paid in full every month. The payment conduct of the account is much more important.


Paying interest will not have a negative effect on your credit rating.

chattychappy

Ben8282 wrote: »

If you have a specialist card such as the Clarity card (or perhaps any card for that matter), I can't see that the card issuer would view the withdrawals negatively especially where it was obvious that you were on holiday/travelling and they were repaid in full by the payment due date of the next statement on a card that I am assuming is regularly paid in full every month.

I agree with your post entirely. I regularly use Clarity/Santander Zero and occasionally Barclaycard to draw cash overseas.

On your credit report, other lenders wouldn't know that you are drawing cash on a "specialist" card as (unless I'm mistaken) they don't see the name/type of credit card you have.

So as you suggest, I think CC ATM withdrawals can only be seen as negative if it looks like you are in distress and using them to meet minimum payment obligations.