cash withdrawals and making payments

glocal

I am currently abroad using my Halifax Clarity. At the moment Halifax shows a mix of purchases and cash withdrawal, all in euros converted by Halifax as normal. With cash withdrawals being subject to interest from the day they were made, I should of course make payments to clear these entries asap. I am not sure how you can make sufficient payments to cancel specifically these entries and leave purchases for later. Am I right in thinking that withdrawals are automatically prioritised by the credit card issuer?

Also, is it true that you shouldn't really make payments into the credit card account before an entry shows up? My understanding is bank don't like people pre-loading CCs. And what counts as 'showing up'? ie entries may appear as 'pending' for a while. Presumably interest is charged while an entry sits there.

Many thanks

Michael

agrinnall

I'd just pay a little more than the cost of each withdrawal to cover the amount plus any interest charged plus a bit extra - the bit extra will go towards paying off purchases. Even if you don't have any purchases it's unlikely that they'll fret about you going a small amount into credit.

It's right that you should only make a payment after the withdrawal shows in your account. I'm not sure that they will ever be 'pending', but as I don't do credit card withdrawals I can't be certain. The interest charged will be pennies if you are quick to make the payment.

chattychappy

I have a Clarity card. This is how it works:

Any payment received will be applied in this order:

1) cash transactions shown on a previous statement
2) purchases shown on a previous statement
3) interest shown on a previous statement
4) cash transactions not yet on a statement
5) purchases not yet on a statement

[This assumes that your cash APR is not lower than your purchases APR, which is very unlikely...]

NB the summary box doesn't mention the "statemented" rule. It is in the full T+Cs.

So if you have just made an ATM withdrawal, you can only stop interest running by paying off any previous statemented balance first. If you use DD (I don't) then understand the interaction between DD and manual payments. You certainly don't want cash to run on an ATM withdrawal because you are "waiting" for a DD to pay off the previous balance.

On your question of pre-loading, it's not pre-loading if you pay once the withdrawal has appeared on your account. You don't need to wait for the statement to be generated. It usually appears within a day or two. Arguably it's not pre-loading to pay immediately on making the withdrawal, even if it hasn't appeared yet - though you might not be sure of the amount to pay.

I pay off my Clarity ATM withdrawals a few days' later and use a different card for purchases. But even if I delay a week or two, the interest is minimal.

glocal

Many thanks for the replies. Suppose you make an early payment that is not sufficient to clear an entry. Are you charged interest on the remaining or the whole amount of a transaction? I seem to remember vaguely that even if the remaining amount is a few pence, you pay disproportionate interest.

chattychappy

I'm pretty sure if you will only pay interest on the remaining amount because I have sometimes paid short and not paid interest on the whole lot. The T+Cs seem to support this interpretation. I remember some years ago, Barclaycard said that interest would only stop running on individual transactions when they (ie the individual transactions) had been paid off in full - so you're right to ask the question. Think I'll do an experiment to find out.

This is different to the usual rule on purchases where you don't pay the balance in full, you pay interest on each transaction back to when it was made. Perhaps this is what you were thinking of. Pay just £1 short of the full balance and you can pay considerable interest. It can even be worth getting a cash advance and using this to pay the shortfall.