Interest charges on cash withdrawls Halifax Calrity

pauljoecoe

So I withdraw some cash on my clarity card abroad and they charge interest immediately. I can minimise this by paying it back ASAP.

However, if I have already used the card for other purchases is there anyway of just paying the cash back or do I have to pay the whole balance?

Also, I continue to use the card. Do I need to keep clearing the balance every day until the statement for that month is issued. It's a bit of a pain.

Anyone else worked like this.

Essentially, I am in Spain using my CC but in Australia my son has done a cash withdrawal on the same account!

[Deleted User]

Statemented transactions are paid first before the usual allocation, so it depends on the timing.

grumbler

pauljoecoe wrote: »

So I withdraw some cash on my clarity card abroad and they charge interest immediately. I can minimise this by paying it back ASAP.

However, if I have already used the card for other purchases is there anyway of just paying the cash back or do I have to pay the whole balance?

Only the cash - after the transaction appears in your online statement. This is assuming that your previous monthly statement balance was either zero or paid in full already.

Also, I continue to use the card. Do I need to keep clearing the balance every day until the statement for that month is issued. It's a bit of a pain.

No, it makes sense to clear only cash transactions in the above manner.

darkidoe

Use another 0% CC for transactions. And keep paying off the Halifax after withdrawals.

pauljoecoe

darkidoe wrote: »

Use another 0% CC for transactions. And keep paying off the Halifax after withdrawals.

That would only make sense if I had another card that was good for using abroad, unfortunately I only have the Halifax Clarity.

pauljoecoe

grumbler wrote: »

Only the cash - after the transaction appears in your online statement. This is assuming that your previous monthly statement balance was either zero or paid in full already.

No, it makes sense to clear only cash transactions in the above manner.

Not sure I understand this.

So the previous balance was paid in full. The card is used for normal purchases and the one cash withdrawal is made which will accure interest. I then use the card for more purchases.

How do I pay off the cash but not the other purchases without paying off the whole balance?

If I pay everything off, up to and including the cash withdrawal will subsequent purchases be ok to leave until the next payment date?

In other words, how do the Credit card company allocate payments I have made, does it go to the cash withdrawal first?

Enterprise_1701C

Just had a quick look at the T&Cs for you. I seem to recall they CC companies had their hands rapped over this a little while ago. Basically it would appear that they now have to clear the highest interest items first. This is taken from their T&Cs, but I do not know how up to date it is.

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.


If you want more information I simply googled halifax clarity terms and conditions

pauljoecoe

Ah...found this in the terms and conditions:

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,

Would someone like to confirm that I have understood this correctly.

If I have used the card for a mix of cash withdrawals and purchases and I make a payment to the account that payment will clear the Cash withdrawal amount first as that is the only one accruing interest. So if I payback just the same amount as the cash withdrawal (plus a little extra for any interest that may have already accrued) then I shouldn't find much in the way of interest charges on my next statement.

pauljoecoe

Enterprise_1701C wrote: »

If you want more information I simply googled halifax clarity terms and conditions

Thanks, our posts crossed. :beer:

chattychappy

pauljoecoe wrote: »

Ah...found this in the terms and conditions:

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,

Would someone like to confirm that I have understood this correctly.

If I have used the card for a mix of cash withdrawals and purchases and I make a payment to the account that payment will clear the Cash withdrawal amount first as that is the only one accruing interest. So if I payback just the same amount as the cash withdrawal (plus a little extra for any interest that may have already accrued) then I shouldn't find much in the way of interest charges on my next statement.

Correct.

Bear in mind the actual interest is quite small. So even if you leave it a few days, the interest will be minimal. On their "middle" advertised APR of 21.95%, you will be paying less than 6p a day on a £100 withdrawal.

zagfles

pauljoecoe wrote: »

Ah...found this in the terms and conditions:

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,

Would someone like to confirm that I have understood this correctly.

If I have used the card for a mix of cash withdrawals and purchases and I make a payment to the account that payment will clear the Cash withdrawal amount first as that is the only one accruing interest. So if I payback just the same amount as the cash withdrawal (plus a little extra for any interest that may have already accrued) then I shouldn't find much in the way of interest charges on my next statement.

You need to read that in full as quoted in post #7.

The important thing to understand is that statemented items are always paid before unstatemented items. So even if you go away with a nil balance on your card - if the statement is produced while you're away you need to pay that statement before paying off any cash advances after the statement date.

Example:
You go away on the 20th April. Balance on Clarity is nil. Your statement date is the 25th April.

You make purchases of £500 on the 21st April.
You make a cash withdrawal of £100 on the 22nd.
You check that cash withdrawal has hit your account on the 24th and pay £101 off. That stops interest.
You make another cash withdrawal of £100 on the 26th April.
You now need to pay £601 to stop interest on the cash withdrawal, because the purchases are statemented and the cash withdrawal isn't. So the purchases will be paid first.