overseas spending - cheaper cash withdrawals by loading credit card

Tarquinius

Hi,

I posted a little while ago on this, but I can't find the thread so thought I'd start another now I've done some more research.

I'm going on holiday for a week and I have a choice of my Nationwide CC or First Direct debit card for cash withdrawals.

Based on the main article it would appar that the debit card would be a bit cheaper for cash withdrawals abroad. This is because all credit cards charge an interest fee on cash advances (irrespective of whether you pay the balance off), and this makes them too expensive for cash withdrawals.

I've got round this by loading my credit card up with a credit balance before I travel. Nationwide tried to discourage me from doing this, but didn't stop me. (For the record, the reason they gave is that if my credit card has a credit balance on it and is stolen, then any loss is my liability. Fair enough.)

For those who are interested in the detail, I think the charges work out as follows for cash withdrawals abroad:

First Direct debit card (which is typical of most debit cards): 2.75% load + 2% cash withdrawal fee - so total charge is a whopping 4.75%

Nationwide VISA card : NO Load + 3% cash withdrawal fee = 3% total charge.

The key is, this only works if you front load the credit with a balance before you travel. If you withdraw cash and THEN pay off the balance when you return, you'll pay a significant interest charge on the cash withdrawal.

If I'm right, then maybe the main article could be amended?

I assume that others must have tried the same trick?

u2o

but whats wrong with Nationwide debit card? Easy to get, no charges.

greyteam1959

I agree with u2o why make things so complicated !!!!!!

alanrowell

Tarquinius wrote: »

(For the record, the reason they gave is that if my credit card has a credit balance on it and is stolen, then any loss is my liability. Fair enough.)

Which bit of "it's a stupid idea" don't you understand - especially when you already have a debit card?

Tarquinius

Thanks, yes that's a very good point about getting a N'wide debit card. It's just that I've left myself with very little time before going to open a new current account, which is what I would need to get their debit card.:doh: But I'm really grateful for your advice and I'll definitely make sure I get one for next time I go abroad.

In reply to the last poster - OUCH! That's a little strong. I'm happy to accept constructive comments, but I'm not quite so sure it can be dismissed out of hand as a "stupid idea".

hammy_the_hammer

Tarquinius wrote: »

Hi,

I posted a little while ago on this, but I can't find the thread so thought I'd start another now I've done some more research.

I'm going on holiday for a week and I have a choice of my Nationwide CC or First Direct debit card for cash withdrawals.

Based on the main article it would appar that the debit card would be a bit cheaper for cash withdrawals abroad. This is because all credit cards charge an interest fee on cash advances (irrespective of whether you pay the balance off), and this makes them too expensive for cash withdrawals.

I've got round this by loading my credit card up with a credit balance before I travel. Nationwide tried to discourage me from doing this, but didn't stop me. (For the record, the reason they gave is that if my credit card has a credit balance on it and is stolen, then any loss is my liability. Fair enough.)

For those who are interested in the detail, I think the charges work out as follows for cash withdrawals abroad:

First Direct debit card (which is typical of most debit cards): 2.75% load + 2% cash withdrawal fee - so total charge is a whopping 4.75%

Nationwide VISA card : NO Load + 3% cash withdrawal fee = 3% total charge.

The key is, this only works if you front load the credit with a balance before you travel. If you withdraw cash and THEN pay off the balance when you return, you'll pay a significant interest charge on the cash withdrawal.

If I'm right, then maybe the main article could be amended?

I assume that others must have tried the same trick?

i don't think you can 'load' a credit card anyway ie pay in money to gain the use of some form of 'credit'.
i think you will pay a cash advance fee regardless....up to you

alanrowell

Tarquinius wrote: »

but I'm not quite so sure it can be dismissed out of hand as a "stupid idea".

You've got a means by which you already don't pay fees, you want to use a method which will incur significant non-replaceable financial loss if the card is misused - I call it stupid

Voyager2002

alanrowell wrote: »

You've got a means by which you already don't pay fees, you want to use a method which will incur significant non-replaceable financial loss if the card is misused - I call it stupid

This comment is not only offensive but also inaccurate.

As the OP has made clear, the fees that he would incurr by using his First Direct debit card are so high as to be unacceptable. And since he does not yet have a Flex account, the Nationwide credit card is his preferred option.

Anyway, I used a Nationwide credit card to obtain cash abroad before I opened my Flex account (and got a debit card). I did not bother to pre-load my card but arranged that it was paid off pretty promptly. There was an interest charge, but it was tiny.

The OP understands that the loss of a pre-loaded credit card might cost him dearly, and so will take good care of it. His choice: a perfectly reasonable one. (I have made similar choices, such as travelling with an expensive camera that could not be insured. Since I understood my responsibilities I made sure that I looked after it properly.)

hammy_the_hammer

this talk of pre-loading a credit card IMHO is irrelevant as i still think you get charged the same fees as if you didn't load it .

Donnie

hammy_the_hammer wrote: »

this talk of pre-loading a credit card IMHO is irrelevant as i still think you get charged the same fees as if you didn't load it .

Not really, as they can't charge you interest on a credit balance.

In the old days, L&V used to pay interest on credit balances. Those days have long gone.

dzug

hammy_the_hammer wrote: »

this talk of pre-loading a credit card IMHO is irrelevant as i still think you get charged the same fees as if you didn't load it .

Yep they charge the same fees (OP says as much) but there is no outstanding balance to pay interest on.