How Halifax Clarity Creidit Card now threatens to steal your money.

polyphonic99

I've been a big fan of the Halifax Clarity Credit Card, as recommended by MSE, and its been my main source of paying for things when I am traveling in Europe. Not only on the card but for the great exchange rate when you withdraw cash

However, as of this September Halifax have changed how your payments are handled, and effectively if you pay off your card before the Direct Debit date, for instance because you have withdrawn some cash and want to avoid the interest, then even though you have paid off what you owe they will take the same amount again in the DD. So you pay twice and they keep the DD payment on your card as a credit, so from my point of view they are stealing my money!


Example. The day my statement was issued 2 weeks, lets say the 8/10 my balance I owed was £1000. The next day I withdrew £500 equivalent in Euros in Spain. Within 24 hours I paid off £1,500 to avoid any interest charges on the £500 cash I withdrew. Today I got 2 text saying:

"If you make any extra payments to your credit card at any time, this will not reduce your direct debit".

I phoned Halifax to query this, and they said that because my statement had been produced, and that I have a DD set up to pay in full, then that DD would still continue next month and take a further £1000 out of my account (even though the current balance is 0 because I have already paid it off). Can you believe it?

Halifax say this was their system 8 years ago and since September they have reverted back to it. They say the only way to avoid them taking the DD amount on your statement (the £1000) is for you to cancel the DD itself, which is what I have now done. You then have to remember to set up a new DD again, the day after your DD was due to be paid eg 09/11, so it can pay for the next months statement, which I am guessing they hope you will forget to do in time, so that they can start charging you interest.

In addition, when you try and make a payment to your CC account there is no warning that it will not reduce your DD amount.

In summary then, as a credit card the Halifax Clarity CC is still fine with a good exchange rate, but I will no longer use it to withdraw cash in Europe, I will get a separate card from another provider for that.

I did ask the agent to thoroughly explain the situation, and he did go through it twice, and I took notes, so I'm pretty sure I have got this right, but MSE you might want to look into this yourselves, and I am happy to be corrected if I got this wrong.

Anyway, be warned.

[Deleted User]

polyphonic99 wrote: »

I am happy to be corrected if I got this wrong.

Yes, you've got it wrong.

They're not stealing your money.

The change means that the DD is still taken, bu the money is not stolen. It appears as a credit on your account, which will then be spent as you make future transactions. It could also be requested as a refund.

It may be annoying from your perspective, but it's not theft.

forgotmyname

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Terry98

forgotmyname wrote: »

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Only 3 today......it seemed more than a 133 the other day.

Dobbibill

if you don't have a DD to take the full amount you can still make ad-hoc payments. All the system will take is either £0 if you choose not to pay via DD or min payment if you switch to that option.

Pay a different amount via DD or a via a different method.

buglawton

I've been using Clarity abroad and getting cash on it there. In a previous discussion someone pointed out the 'trick' of paying off balances to avoid interest. In the end I didn't bother and allowed the DD to take care of it automatically. Paid around £25 for one holiday in interest, because a lot of businesses took only cash. But on other trips paid less due to using card most of the time to pay. I've calculated that even with interest I'm saving 3-4% in currency charges. Also having a separate travel CC is good for security and Halifax update the transactions in the app much more quickly than other cards, also good for peace of mind.

So even with the change, Clarity is still a good deal. But thanks OP for the heads-up.

bd10

May I suggest the OP reads the T&C of the card? As irritating as this policy change is (I grant you that), Halifax have been communicating this. We all got letters a few weeks back and the new T&C arrived yesterday in the post. I went through the whole T&C and they repeatedly stated that DD will not be adjusted etc etc. And the T&C are very clear and unambiguous now.

Marchitiello

I think there are two things at play here that contributed to the OP frustration (even though no one is stealing any money as these are credited to your account):
- first is the change to the DD processing, which until September was very good with the ability to pay off some off the amount manually and the DD taking care of the rest (if set to pay in full). This was changed across the Lloyds Banking Group and they have been fairly good in sending reminders when a DD was set up and manual payment received (i did get mine). In my opinion and, following from my personal relationship manager advice, the way around was to set up the DD to min payment and pay the balance manually, however even though this was done two weeks in advance, the full DD was taken from my account and then returned within a day fallowing a quick call to CS.

-second: I think the established way of managing the Halifax Clarity card for cash withdrawal abroad was to pay in the money within 24 hours of the transaction appearing on your online banking. This way, as the DD amount is only finalised when the monthly statement is closed, any mid month transaction would not form part of the DD amount payable (if set to pay in full)

redux

Once the T&C change is understood, it doesn't mean things are awkward, just a slight change of approach in how you make payments.

Before looking at that, consider that interest runs on a cash advance from the date of withdrawal, but payments to the account go first towards things that have already appeared on a statement.

Thus, already, an early payment in of just the amount of withdrawal would not avoid interest, as the cash item wasn't on a statement yet.

Thus people who make a large withdrawal might choose, like the example the OP gives, to pay back the full balance, the statement plus current spending since statement including the cash.

The change now would suggest there are now two approaches.

1. Someone who makes a significant cash withdrawal can make an immediate payment in of the cash amount, not the total balance, then the DD collects the statement balance. This will incur some interest, until the DD, but it will actually save money for the person who didn't quite understand the old system, who would pay off the cash amount straight away, then have the DD collect the last statement amount reduced by the early payment in, and then actually incur interest on the cash all the way past the following statement until payment towards that.

So the OP example would mean now pay in £500 not £1500, and the £1000 is collected by DD. Interest is charged on £500 from withdrawal to DD collection date.

2. Someone who doesn't like this new system can do their payments manually, choosing what to pay each time, without bothering about DD.

Personally I think the need to withdraw cash is overrated. My last 8 trips abroad, including 6 days to/in/from Switzerland, have involved a grand total of 17 euros on a hotel in Slovakia which didn't take cards (I knew in advance), and 30 euros withdrawn near Lille station on the way home as a tip for the tour guide (could equally have given him pounds if we'd had a few more).

And I used a Revolut card for that, not a credit card. Prepaid balance, but easy to top up online just before cash is needed.

chattychappy

Personally I feel I've been "stealing" from Halifax for years by doing ATM withdrawals and quickly paying them off.

18cc

The statement date is key here. Pay off any amount before the statement date and it won't be taken by DD. Your DD will take the statement balance, that is all. If you want to pay off some of your balance, do it before the statement date.