Halifax clarity - Getting money abroad

bbarroso

As per title, I have an Halifax Clarity card, which I use for every day purchases, but from time to time I have the need to get cash for various purposes, while abroad.

What is the right procedure to pay off the cash withdrawal? Do I have to pay the whole balance on the CC? Do I need to be in credit? Or any money I top up goes directly to pay off the cash withdraw first?

Thanks

YorkshireBoy

Depends if you're carrying a statement balance or not. See the allocation of payments section of your T&Cs.

Assume you're OK with the actual withdrawal, ie how to avoid DCC?

redux

Money you pay in to the account goes first against the part of the balance that has the highest interest rate.

So if you usually pay the statement balance in full it should definitely go to the cash advance. But check the stated T&C. Otherwise I don't know; check if there are different interest rates.

Some people on here would make a payment into the account within a day or two of the cash advance, to minimise interest.

But if you leave it a few days, make sure that by the next payment date you send in an amount that covers both the cash advance and the amount that was already due as per the last statement. Otherwise you'll still be incurring interest after that.

bbarroso

My last statement was £60.
My current owed balance, for the statement that hasn't closed is about £200, that includes the last statement for which the DD hasn't been taken.

I got €10 the other day. That transaction is not showing on my list of movements for the card, only the purchases. This was last Thursday (purchases are updated within a few hours, I can see everything I've done today already)

So are you telling me if I pay 60+£10 I pay the money transaction (10€)? Or do i have to pay the full balance? And if paying the full balance, how can i pay it if the money withdrawn doesn't show on my list of transactions?
Also, isn't it bad for my credit rating to have a zero balance on the CC all the time, if i pay in full every time I withdraw cash?

This is all very confusing, it seems very few people have actually used the card abroad and there is a lot of assumptions.

Vortigern

Wait till the cash withdrawal appears online. Then pay £60 plus 10euro.

For the tiny amount of interest you'll pay on 10euro it's just not worth the hassle. You might as well wait till you get home.

ETA: Yes, I've used it abroad and I haven't made any assumptions, but read the terms and conditions if you don't believe me

malc_b

I think you will find if you read the T&Cs that the last statement is paid off first, then cash advances, then any new purchases. Hence it you want to pay almost no interest either just use the Clarity for cash and use another card for purchases, or accept that you will have to pay last month's bill first, plus any cash advances. Or you could just pay the interest, on the typical 12.9% rate, £100 would be £12.9 for a year or about £1-2 for a month or so.

Also note if you have a DD set up to take the full amount each month then that will be taken even if you have paid off that bill separately and the DD puts you in credit. The same thing happens with returns. Any returns after the statement date don't reduce the DD so the DD can then put you in credit (if you stopped spending on the clarity after the statement date). So if you had say £200 at the statement date and then took £60 in cash you would need to pay £260 to clear them both and stop interest accruing on the £60. And if you had setup a DD to pay off in full each month then Halifax would still take £200 on the DD date.

bbarroso

Thanks for the feedback.

£10 is not worrying me too much, but I may need to take larger amounts, hence better to know for sure.

Seems like a good tactic would be to wait a few days before the statement closes to withdraw money and then just pay in full. I have no issues in paying in full, just in having the card register 0 balance on statement closure all the time might get my credit score down. I'm constantly travelling, so this is a ongoing thing, rather a short term holiday.

I'm not too sure about the DD rules. I know for a fact a couple of months ago I called them and asked to make a debit card payment to cover my statement and the direct debit wasn't taken. Not sure if it works any differently trough BACS.

Better set my DD to pay the minimum just to be on the safe side

redux

I didn't say you have to pay in full, including all current spending yet to appear on a statement, in order to make the balance zero.

I don't know this card myself, so what I say may be subject to correction by others, but what I would assume as good policy is pay the amount on the last statement plus any current cash advances.

Whether money sent goes first to the last statement balance or go the cash already incurring interest, paying off both would stop the interest in either case. Whereas someone who takes a cash advance and then sends in only the last statement amount will still have either the cash advance or a part remainder of the statement balance outstanding.

For example, let's suppose someone has £300 at the last statement, £200 worth of spending since, and takes a €100 (~£89) cash advance. Some people might send £90 soon to cover the cash advance. I'm saying don't misthink this and only send £210 more; still send £300 as well, to make £390, else something will incur interest. That doesn't mean £600 is necessary yet though.

YorkshireBoy

bbarroso wrote: »

This is all very confusing

For you it seems, yes.

it seems very few people have actually used the card abroad

Tens of thousands use it abroad. Thousands use it on this site.

and there is a lot of assumptions.

There's no need to assume anything. How your payments are applied is clearly shown in the T&Cs I referred you to earlier...

Your_Clarity_card_T&Cs wrote:

B7.4 How we apply your payments

We use your payments to clear any overdue amounts before we apply them to your latest minimum payment.
We will reduce the amount you owe in the following order:

• any overdue amounts from previous statements; then
• the remaining balance on your statement; then
• any recent transactions not yet shown on your statement.

We use your payments to pay off balances charged at the highest interest rate first and so on down to balances with the lowest interest rates. This means the more expensive balances are always paid off first.

If there is more than one type of balance at the same interest rate, they are paid off in the following order: cash transactions, purchases, balance transfers and money transfers, and then default charges (plus any interest or charges incurred as a result of those balances). For each type of balance, your payments will pay off the oldest balance (and related fees, charges or insurance) first.

So if you had a balance on the last statement they sent you (eg waiting to be paid by DD), then you need to pay an amount equal to the last statement balance + the amount of cash withdrawals as soon as you've made the withdrawal in order to eliminate/minimise any interest.

chattychappy

Yep, I'm one of the thousands.

Follow this procedure:

1) Make ATM withdrawal.
2) Check your account online to get (or estimate) the sterling equivalent.
3) Send a payment equal to the sterling equivalent plus any outstanding balance on your previous statement.

Don't panic if leave it a few days - interest is minimal. If you have a DD setup, it CAN be complicated because despite making a manual payment to clear the previous statement balance, a DD could still be taken and take it again.

I would cancel any DD and do everything manually if you want to minimise interest whilst mixing purchases and ATM withdrawals. Of course, if you are a DD-junkie, you might not be used to such a grown-up approach. If you forget a payment, the late payment charges could far exceed any interest you might have had to pay on the ATM withdrawal by letting the DD take the strain. So only cancel your DD if you are sure you won't miss payments.

Nebulous2

It's easy to overthink this. The interest payments are relatively modest and paying a few pence isn't the end of the world.

I'm recently back from 3 weeks away. I left home with a statement balance of £400 which was unpaid. Shortly after landing I took 110 euros out of an ATM. After it appeared on my transactions on the Halifax app I paid in £500, enough to pay my full bill and my first batch of Euros. I took out a further 400 euros in 100 euro increments and made a couple of payments of £200 each. My bill was produced the day before I returned home and I had £0.47 in interest.

There is still a balance of £400 on the account, for an annual insurance premium which was paid whilst I was away and some transactions I made in euros.

So I have benefited from ready cash when I needed it, without carrying 500 euros around. I've had the mastercard exchange rate, which is pretty good, and I'll clear my account before the due date, so there will be no further charges.

All for 47p. I think the 40 euros I have left have probably appreciated by that amount since I took them out of the ATM.