Clarity interest for foreign cash withdrawal

glocal

I used my Halifax Clarity while in Greece for purchases and a single 500 euro (£450) ATM withdrawal. Within 24 hours, on 6 September, I transferred £510 to the card to cancel the cash withdrawal and avoid paying too much in interest (I paid more than the actual amount just to be sure I covered the whole amount after conversion). Several weeks later I received a statement showing that on 7 October I was charged £7 interest. My understanding is that I should be charged interest for one day at most. I have been doing precisely the same thing for years and I was never charged more than a few pence in interest. Before I call Halifax, am I missing something here?

Vortigern

Two possibilities:

1. A payment will be applied to the existing statement balance before any later transactions. Your payment of £510 has been used to clear the balance from your previous statement. Was there a balance on a monthly statement before you made the payment?

2. You paid the £510 before the ATM withdrawal appeared on your account. The payment would have gone towards the purchases already debited.

glocal

There was a balance from the previous month, but a DD payment clearing it was due on 1 October. I thought that any early payments cover cash transactions first as they are the most expensive. If that is not true, do we have to pay in enough to cover any previous balance + the recent cash transaction(s)?



According to the statement, I paid the £510 on 6 September, and I withdrew the cash on 5 September. In my experience, it can take a while before the ATM withdrawal amount shows up online, and waiting until it does means interest will be charged.

Ben8282

Payments will always be applied to the balance of the previous statement before being applied to transactions not yet shown on a statement.

glocal

Good to know for next time. Thanks.

bouncydog1

Even if your cash transaction appears on your statement, if you haven't paid the previous statement in full, then any cash paid will be applied to the previous statement balance first.

If you have paid the previous statement balance, then wait until the cash transaction appears on your online statement i.e. not pending. Then transfer funds and it will be applied to the cash transaction first.

[Deleted User]

Once it has statemented, payments will go strictly in high to low rate order, regardless of previous statement balances.

glocal

bouncydog1 wrote: »

If you have paid the previous statement balance, then wait until the cash transaction appears on your online statement i.e. not pending. Then transfer funds and it will be applied to the cash transaction first.

Or I suppose you must transfer in enough funds to cover any outstanding amount from the previous statement and the new cash transaction. Thanks for clarifying.



TBH I don't understand why funds transferred in early won't be applied to subsequent cash transactions (assuming there is no outstanding balance from a previous statement), but fair enough.

[Deleted User]

glocal wrote: »

Or I suppose you must transfer in enough funds to cover any outstanding amount from the previous statement and the new cash transaction. Thanks for clarifying.

Only if the cash transaction hasn't statemented.

SnowTiger

glocal wrote: »

TBH I don't understand why funds transferred in early won't be applied to subsequent cash transactions (assuming there is no outstanding balance from a previous statement), but fair enough.

There has to be a set order in which payments are allocated, otherwise Halifax could allocate them willy-nilly.

Halifax helpfully lists how payment will be allocated on the back of the statement you receive.

Allocation of 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.

If credit card companies allocated payments against future transactions a punter would never pay off their credit card balance.

MacDaddy2605

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