Interest charge for foreign cash withdrawal Halifax Clarity 28 February 2020 at 5:44AM in Credit cards 7 replies 301 views

VXman

I have used my Clarity card for years when withdrawing cash abroad.I usually pay it off within a few days to minimise interest charges. I believe when you make a payment it automatically goes to pay back the cash withdrawals first? This has always worked for me in the past but this month the charge is higher than I expected.
I withdrew £155,62 from an ATM in the Philippines on 28th Jan and paid back £156 on 1st Feb
I withdrew £229.31 on 31st Jan and then paid back £230 on 5th Feb.
On 24th Feb I was charged £3.38 in interest. This strikes me as quite a lot. I am sure normally I am only paying pennies normally. Interest rate for cash is supposedly 19.95 APR
Can anyone a little more mathematically adept than me confirm this whether this is about right or too much?

[Deleted User]

We're you already carrying a balance?  If so, you probably paid it too early as it wouldn't have statemented.

You need to work out how many days the cash was carried for. 

zagfles

19.95% APR works out to almost exactly 5p per day per £100. So you've been charged somewhere between 2 and 3 weeks interest.

As above it'll almost certainly be because you had a statemented balance. Payments always go towards statemented balances before unstatemented. All credit cards work like this, they have to when you think about it, it's not some con trick. You can't pay off an unstatemented cash advance until your statemented balance is paid off.

Depending what you paid (or what DD was taken) towards your statement, you might still be being charged interest on the cash advances.

VXman

Not sure I totally understand that, but is the answer to pay off the whole card balance before/immediately after taking cash withdrawal?

i have an automated direct debit in action for the full balance each month but it wouldn’t be a problem to pay it early.

Terry98

There have been quite a few threads on this since Halifax changed their rules on this about a year ago. This is similar to the OP's question https://forums.moneysavingexpert.com/discussion/5918617/clarity-interest-for-foreign-cash-withdrawal and reaffirms  the reply here but not the direct debit question. I think the recommendation was to cancel the DD and pay off any balance 'in full' as soon as it arrives on the account. There was also a discussion about having a credit balance on the account with is contrary to the T&C's 

2e0arr

what advice did Halifax give you ?

zagfles

VXman said:

Not sure I totally understand that, but is the answer to pay off the whole card balance before/immediately after taking cash withdrawal?

i have an automated direct debit in action for the full balance each month but it wouldn’t be a problem to pay it early.

The whole of the last statement balance needs to be paid off before you pay off unstatemented cash advances. You don't need to pay off unstatemented purchases, but be sure the cash advance shows up online in recent transactions and not "pending".

zagfles

2e0arr said:

what advice did Halifax give you ?

Likely far less reliable advice than people here.