Does withdrawing cash affect your credit score?

StevieJ

Specifically when abroad on the advised credit cards for travel?

adindas

StevieJ wrote: »

Specifically when abroad on the advised credit cards for travel?

There has been a lot of discussion about this. The conclusion so far is that even there was an impact, the impact is not significant enough to worry about.

The fact is that some people have been doing this for ages, yet they still get 0% interest on BT credit cards.

Candyapple

Ditto to what adindas said. Been doing it for years for various trips abroad with Clarity and Creation card, never been declined for any form of credit since then either.

Jaglad111

The only pitfall is it may reflect poorly on a mortgage app if the widthdrawals were made monthly as its generally an expensive way to borrow. On its own it wouldn't be an issue though.

PeacefulWaters

If you're withdrawing cash AND increasing the card balance outstanding each month I'd say yes, it'll be looked at negatively by lenders' credit scoring systems.

Ben8282

Any effect will be relative to your overall credit account conduct. If your credit files show no sign of financial stress, for example no overdraft use, cards repaid in full each month, reasonable amounts of available credit etc then there will be no adverse effect. The problem arises when lenders believe, from the state of your credit files, that you are making the cash withdrawals either because you need them to get through the month or you need them to keep up the repayments on your credit commitments.

chattychappy

Yes, I've been withdrawing cash this way for a few years now, principally on Halifax Clarity and Santander Zero. At times I've made as many as 20 or 30 withdrawals in a month. It probably averages out to one a week. In fact, even when in the UK I used Clarity in preference to my debit card.

I've concluded it makes no difference to your score (mine is 999 on Experian for those who are interested in such things...) EXCEPT when taken with other factors - eg missed payments, overlimit, only paying minimums.

Remember - getting a cash advance is part of the product and within the T+Cs. It is something that is promoted, not something that is "naughty". This is different to missed payments, overlimit etc etc.

I don't know if mortgage companies take a particular view, but I've never had a problem obtaining new CCs when I want them.

adindas

chattychappy wrote: »

In fact, even when in the UK I used Clarity in preference to my debit card..

Any good reason for that ?? or just because of practicality such as you prefer to carry just one card in the wallet, other cards hidden deep in the bag/suitcase ??

chattychappy wrote: »

It is something that is promoted, not something that is "naughty". This is different to missed payments, overlimit etc etc.
.

Good point ..

chattychappy

adindas wrote: »

Any good reason for that ?? or just because of practicality such as you prefer to carry just one card in the wallet, other cards hidden deep in the bag/suitcase ??

1. My Nationwide debit card also operates a card reader so I can manage my current account online. If the debit card gets lost or swallowed, then I am unable to pay bills (including CCs). Getting hold of a replacement could take ages if I'm overseas. I asked Nationwide if it was possible to separate the functions - ie have one card for the card reader and one card as a debit card (as on my Lloyds business account) but they said it wasn't.

2. If a debit card is cloned/fraudulently used, then the money comes out of my current account which could have "knock on" effects - eg by putting me overdrawn or causing payments out to be declined. True, these effects can be reversed when the error/fraud has been accepted by the bank, but it takes alot of time and is difficult to sort out if you are abroad. On the other hand, fraud on a CC is simpler - I can just switch to another card whilst things are being sorted out. In other words using CCs rather than a debit card acts as a "fire break". With a debit card it's MY money that's taken which I'm left struggling to get back. With a credit card, it's THEIR money which they must struggle to get from me.

3. Regulation. A somewhat tenuous point, but in the case of unauthorised use, the CC cannot make you liable (beyond £50) if you are negligent whereas you can be held liable in the case of a debit card (unless you are overdrawn).

As you suggest, my debit card is usually locked up somewhere. It is usually brought out when doing online transfers.

redux

chattychappy wrote: »

1. My Nationwide debit card also operates a card reader so I can manage my current account online. If the debit card gets lost or swallowed, then I am unable to pay bills (including CCs). Getting hold of a replacement could take ages if I'm overseas.

Nationwide has another log-in method, using your customer number and any one of 3 items of personally defined memorable information.

adindas

chattychappy wrote: »

1. My Nationwide debit card also operates a card reader so I can manage my current account online. If the debit card gets lost or swallowed, then I am unable to pay bills (including CCs). Getting hold of a replacement could take ages if I'm overseas. I asked Nationwide if it was possible to separate the functions - ie have one card for the card reader and one card as a debit card (as on my Lloyds business account) but they said it wasn't.

2. If a debit card is cloned/fraudulently used, then the money comes out of my current account which could have "knock on" effects - eg by putting me overdrawn or causing payments out to be declined. True, these effects can be reversed when the error/fraud has been accepted by the bank, but it takes alot of time and is difficult to sort out if you are abroad. On the other hand, fraud on a CC is simpler - I can just switch to another card whilst things are being sorted out. In other words using CCs rather than a debit card acts as a "fire break". With a debit card it's MY money that's taken which I'm left struggling to get back. With a credit card, it's THEIR money which they must struggle to get from me.

3. Regulation. A somewhat tenuous point, but in the case of unauthorised use, the CC cannot make you liable (beyond £50) if you are negligent whereas you can be held liable in the case of a debit card (unless you are overdrawn).

As you suggest, my debit card is usually locked up somewhere. It is usually brought out when doing online transfers.

Ditto with Redux
People are able to use personal security information to open online banking without the need of card reader.

I myself have been doing this to manage my Nationwide online without the need of the card reader.

You sometimes still need the card reader for payment to payees which are not on your list or if you transfer quite unusual amount.

Otherwise for viewing you should be able to access your online banking without the need of card reader.