Avoiding interest on overseas ATM withdrawals

Salamat

I have three credit cards designed for overseas use, with zero transaction or foreign currency charges. In the past, when I have made Overseas ATM withdrawals, I have sent a covering payment by debit card on the same day and ended up only paying pence in interest charges.

Two of my cards, Halifax Clarity and MBNA, are operated by Lloyds and they seem to have changed their terms and conditions which seems to mean that this won’t work in the future and it will be impossible to avoid some interest charges. It would seem that any additional payments will no longer be allocated to the more expensive debits on current statements AND more recent transactions, but would appear to be allocated to the more expensive items, then other items, on the current statement, BEFORE paying off transactions after your statement, eg your latest ATM withdrawal. (Whether or not this payment will reduce any future Direct Debit set up to clear the current statement seems a ‘grey area’! I was on the phone with MBNA today and they wouldn’t/couldn’t answer the question!)

I think, unless anyone can see a flaw in the suggestion, is to use one credit card purely for normal transactions, which you can then pay off in the normal way, then use a second card purely for the foreign ATM withdrawals, which you then pay off, ideally the same day with a debit card payment. In this way the second card will only ever have the ‘more expensive’ items and your payment will either pay off those on your current statement, or will go on to clear items due to appear on your account.

Hope that makes sense?

[Deleted User]

There's been no change to allocation of payments. Halifax will still put payments towards the highest rate statemented transaction. I'm not aware MBNA have made any changes.

If you're already carrying a statemented balance, then you will need to clear it in full before the cash transaction is paid.

JGB1955

... or get a Barclaycard Platinum purely for cash withdrawals abroad.

Salamat

MBNA have recently become part of LLoyds and have just switched over to LLoyds terms and conditions.

So, would you agree, operating two cards as I suggested will get round this?

penners324

Get a bank account with a debit card that offers the same atm withdrawal terms. No interest to pay at all.
There are a few about, Starling (upto £300 per day) and Monzo (£200 a month fee free then 3%) are the obvious ones, others do exist.

Ben8282

Salamat wrote: »

Two of my cards, Halifax Clarity and MBNA, are operated by Lloyds and they seem to have changed their terms and conditions which seems to mean that this won’t work in the future and it will be impossible to avoid some interest charges. It would seem that any additional payments will no longer be allocated to the more expensive debits on current statements AND more recent transactions, but would appear to be allocated to the more expensive items, then other items, on the current statement, BEFORE paying off transactions after your statement, eg your latest ATM withdrawal. (Whether or not this payment will reduce any future Direct Debit set up to clear the current

There have been no changes to anything; it has always been like this. Payments will be credited to the outstanding balance of the previous statement before being applied to unstatemented transactions.

Duckyduck

If you’re intending to pay off with a debit card anyway then just open a Starling account and use that debit card. They’ll even pay you a tiny bit of interest on money held in the account.