Paying off foreign cash balances

Jolly_Roger

I have a Liverpool Victoria cc, which I use exclusively for taking money out when I travel abroad. However, despite the fact that I always pay off my balance as soon as I receive a statement, my next statement, even though I have not used the card in the interim, still contains a further balance.
I have used spoken to LV who explained that, when taking out cash, interest is charged from the moment of the withdrawal until the statement is issued, but continues from there on in until the full balance is paid. So, even though I pay off my balance, the delay in the money arriving effectively means I still have to pay additional interest. However, this can only last over two statements, with the caveat that I don't make any further cash withdrawals in the meantime.
Can anybody tell me whether this is standard industry practice or not? I originally got the LV card when reading one of Martin's articles on how to take money out abroad and LV was one of the recommended credit cards. Is this really the case bearing in mind the above?

CLAPTON

All CC cards work this way which is why the advice is never to withdraw cash on a credit card. You pay a cash advance fee plus the interest from the day you withdraw to the time its paid off which in practice measn you need to pay off fro two consecutive months before interest stops. This is the same whetehr you draw cash in the UK or abroad. At least the LV card doesn't charge an additional foreign payment surcharge like most other cards (as far as I know.)


use a debit card instead.. preferrably one like nationwide that dont charge a foreign exchange surcharge.

Jolly_Roger

Hi CLAPTON,
The problem is that sometimes I have to make several trips abroad in a very short space of time and I don't always have the ability to pay off all the balance in one go. In this respect, I don't know whether a debit card would help, because I would have to have an overdraft agreement in place at a bank which I would not normally use. Hence a cc makes more sense. But is this necessarily the case?

YorkshireBoy

The LV card doesn't charge a conversion fee (typically 2.75%) for foreign transactions. That is it's only advantage as far as cash withdrawals are concerned.

As you have found, when you use it for cash withdrawals you're charged a cash advance fee (presumably?) and interest from day one (presumably at 20%+ APR). You then need to clear two statements in full before the interest stops accruing, or overpay the first statement slightly...something you say you're not always able to do.

As CLAPTON says, the Nationwide FlexAccount, with a debit card and agreed overdraft facility, is the way to go. At 9.9% EAR, the authorised overdraft rate is at least half the cost of the LV cash advance interest rate PLUS you will not pay a cash advance fee or a conversion fee for foreign currency withdrawals.