"cash interest" is this for real ?

pilotslaptop

stupidly i never look at any other info on my credit cards apart from where and when purchases have gone out.
last week i noticed that i paid £9.93 in so called cash interest, a friend told me that this was for withdrawing cash...i have not withdrawn cash in over 4 years on this card and dont even know my pin number.i called cap 1 and was told that if i draw cash at anytime i have to pay interest on it even tho it was 4 years ago (a total of over £396 up to now)!! apparently i have to pay the full balance for it to be withdrawn (which i would have done twenty times over by now as i pay off large lump sums quite often)

has anybody else come accross this procedure ?

thanks

HeadInSand_2

It's standard practice (to charge interest on cash and leave it on there as the last balance to be cleared, thus earning high interest) - you say you regularly paid large lump sums off, did these ever clear the balance completely..?

ManAtHome

There are some"nearly cash" transactions which CCs treat as cash withdrawals - most common are buying foreign currency and online gambling.

lisyloo

Hello pilotslaptop,

I suspect that ManAtHome is right.
You have probably made a "cash advance" without realising it.

Have you paid for anything like foreign currency, vouchers, on-line gambling?
This attracts interest immediately so you do not get any interest free days as you do with purchses.

This is all stated in your terms and conditions so you won't have any comeback if you made the transcation (unless it's a clerical error or fraud).

JohalaReewi

There was a thread about purchases from CDWOW being treated as cash advances because they switched to a new credit card payment merchant. Can the CC company help? Was going to link to it but the forum search isn't working.

pilotslaptop

thanks for the replies
i use my credit card for 1 thing and 1 thing only and its to buy records online from holland and germany.so i take it this is classed in the foriegn currency bracket. :mad:

UK007BullDog

hmmmm which means all the money you thought you saved actually accrued and you are paying the same or even more for your records abroad.

Have a look at the nationwide CC might work better for you but ask them first.

lisyloo

Hello,

You may also find you are paying commission on the currency conversion (probably).
This is hidden in the exchange rate i.e, the exchange rate will be around 3% higher.

I think you really need to stop and calculate whether the savings justify the currency conversation and interest charges.
Bear in mind that you will may also have compound interest.

e.g. buy cd at time A
get statement at time B including interest including UP TO B
pay off at time C
There is still interest to pay on the period between B and C and they will charge you interest on that.

Sounds to me like it might not be worth it, unless you are getting a massive discount.

JohalaReewi

pilotslaptop wrote: »

thanks for the replies
i use my credit card for 1 thing and 1 thing only and its to buy records online from holland and germany.so i take it this is classed in the foriegn currency bracket. :mad:

These will be foreign currency transactions so you will be paying commission on the exchange rate but they should register on the card as a purchase (not cash advance).

What ManAtHome was referring to was purchasing foreign currency on the credit card which is a cash advance, or using an overseas ATM.

Have a word with your credit card company and ask them where this charge came from.

If you just buy from Holland and Germany in Euros, you are better off getting a Nationwide or Post Office credit card. No commission on foreign currency transactions so you get a better exchange rate.