Halifax's (Clarity) new DD policy

Terry98

I automatically pay the full amount by DD after every statement.

When I get cash out abroad I always pay the sterling equivalent to my account within a couple of days to ensure I pay the minimum in interest. I assume the next months statement will show credit payments up to the statement date and the DD will be reduced accordingly.

The question is do I try to ensure no cash withdrawals between the statement date and the DD date or keep on doing what I have always done?

pochisoldi

Vortigern wrote: »

I wonder if Halifax realise that this provides a way of pre-loading a card, without breaking their rules, before foreign cash withdrawals?

• Do normal monthly spend on the card
• Pay in full before the DD date
• DD also takes full payment creating a credit balance

The Halifax explanation states that the only time the direct debit will be reduced will be to avoid creating a credit balance.

Scenario 1:
Statement Balance: £10
Statement DD amount: £5
Customer pays off £7.50
Direct debit taken: £2.50 (reduced)
Balance after DD is credited: £0

Scenario 2:
Statement Balance: £10
Statement DD amount: £5
Customer pays off £7.50
Customer spends £7.50
Direct debit taken: £5 (unchanged)
Balance after DD is credited: £5

The upshot of this is that in certain circumstances, people who (a) clear their balance in full, (b) make cash withdrawals and purchases abroad and (c) pay down cash withdrawals as soon as they are posted, could end up paying off all or part of this month's purchases on this month's due date, rather than on the due date next month.

It all dependant on what your balance was last month, what type of direct debit you have (minimum, fixed amount, full balance), the value of purchases made this month (compared to last), and when you made purchases (before this month's DD cutoff date or after).

PochiSoldi

zagfles

I think people here are confused about the Clarity actually works. If you use the Clarity for cash withdrawals, and you want to minimise interest, then it makes no sense to have a DD in the first place, either before or after this rule change.

Paying off cash withdrawals immediately does not stop interest if you have an outstanding statement balance, as your payment will go towards the statement balance, not the (unstatemented) cash withdrawal

Terry98

zagfles wrote: »

I think people here are confused about the Clarity actually works. If you use the Clarity for cash withdrawals, and you want to minimise interest, then it makes no sense to have a DD in the first place, either before or after this rule change.

Paying off cash withdrawals immediately does not stop interest if you have an outstanding statement balance, as your payment will go towards the statement balance, not the (unstatemented) cash withdrawal

I use a cashback card for purchases in the UK and ensure my Clarity only has cash withdrawals on it when I am away. If I pay for my travel in euros before I go I ensure this is cleared before I start my holiday. I find using cash only when I am abroad is no problem but I hardly use any cash in the UK now!

EveryWhere

Terry98 wrote: »

I automatically pay the full amount by DD after every statement.

When I get cash out abroad I always pay the sterling equivalent to my account within a couple of days to ensure I pay the minimum in interest. I assume the next months statement will show credit payments up to the statement date and the DD will be reduced accordingly.

The question is do I try to ensure no cash withdrawals between the statement date and the DD date or keep on doing what I have always done?

Why not just use a different card for ATM withdrawals? At least when getting close to statement dates. https://www.starlingbank.com/travel/
That way you don't have to deal with sending payment to the CC account to cover withdrawals.
Likewise, Barclays Platinum Travel VISA. No interest to pay regardless as long as statement is paid in full. Though the VISA rate may be lower than Mastercard rates in most cases.

Terry98

EveryWhere wrote: »

Why not just use a different card for ATM withdrawals? At least when getting close to statement dates. https://www.starlingbank.com/travel/
That way you don't have to deal with sending payment to the CC account to cover withdrawals.
Likewise, Barclays Platinum Travel VISA. No interest to pay regardless as long as statement is paid in full. Though the VISA rate may be lower than Mastercard rates in most cases.

Thanks but at the moment I am happy with the Clarity.

Revolut had a similar card to Starling but then had to impose limits. It would not surprise me if the Clarity tightens up even more and then I will look again.

takman

Terry98 wrote: »

Thanks but at the moment I am happy with the Clarity.

Revolut had a similar card to Starling but then had to impose limits. It would not surprise me if the Clarity tightens up even more and then I will look again.

You should always have at least 2 cards with you when travelling abroad just in case there are any issues with one of them.

zagfles

Terry98 wrote: »

I use a cashback card for purchases in the UK and ensure my Clarity only has cash withdrawals on it when I am away. If I pay for my travel in euros before I go I ensure this is cleared before I start my holiday. I find using cash only when I am abroad is no problem but I hardly use any cash in the UK now!

So why do you need a DD?

Terry98

zagfles wrote: »

So why do you need a DD?

Thinking it through you are right I don't need it. I could then pay the statement balance manually.The full balance DD has always been a backstop to ensure I do not pay interest but this new policy changes things.

takman wrote: »

You should always have at least 2 cards with you when travelling abroad just in case there are any issues with one of them.

Yes I always do.

TOP_CAT

So in summary what is the best option for those who in the past would pay off the cash advances and purchases online during a trip away ?
Which would stop the cash advance clock ticking .

I also used to put the card in credit for the beginning of a trip as this worked for myself

I assume the best option is cancel the direct debit completely and then put the card in credit pre trip and then when the initial positive balance runs out make online payments to the clarity towards any cash advances .

Will this accomplish the same as in the past ?