Withdrawing cash overseas?
|Borrowing | Credit Card
Asked by grobert607, submitted
23 July 2011.
I have a Halifax clarity card which I intend to use on an overseas holiday. Would it be prudent to load it before going, or would this incur a financial penalty. Although there are no charges overseas, interest on cash withdrawals start immediately.
Answered by Justin on 27 July 2011
Unfortunately Halifax doesn't allow customers to 'load' money onto their Clarity card, i.e. you can't have a credit balance against which to draw cash when overseas. This is a pain, as you mention, because while there's no fee for cash withdrawals they're subject to interest straight away.
The Sainsburys Bank Gold Card is an alternative that doesn't charge interest on cash withdrawals provided you repay the balance in full each month and there are no fees on foreign spending. However, there's a £5 monthly card fee, albeit this does include worldwide family travel insurance.
Debit cards avoid paying interest on cash withdrawals (provided your account doesn't fall into overdraft) but, like credit cards, most charge 'exchange rate' fees of around 2.75% on foreign transactions as well as a fee for withdrawing cash of about 2.5% (often with a £3 ish minimum). Norwich & Peterborough Building Society offers a Gold Classic card without such fees, although it costs £5 a month unless you pay at least £500 into the attached current account (and you obviously have the hassle of having to open a current account with them).
So no simple solution I'm afraid. Although unless your cash withdrawals will be significant then probably simplest to use your existing debit card to withdraw cash (and pay the 2.75% or so fee) than go to the hassle of taking on another current account or credit card. Given credit cards are so widely accepted these days then it's possible to get by without the need for much cash in many countries.
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Readers' Comments (3) - To post a comment please register or login
Comment by mickz at 12:15pm on 27 Jul 2011:
I think that an Abbey National Zero account doesn't charge any fees for cash withdrawal abroad and I think it's an ok exchange rate too...
Even if the rate's not brilliant, then at least you can get £25 cash out on the last day of your holiday without getting the £2.50 charge.
Comment by justin at 5:14pm on 27 Jul 2011:
I think the Santander Zero card charges 27.9% APR on cash withdrawals as soon as withdrawn, but you're right, no fee for cash machine withdrawals unlike most cards.
Comment by webwiz at 11:54am on 07 Aug 2011:
They may not like it, but they appear to have no mechanism to prevent front loading. So far I have not had any problem doing this on a couple of cards - though not Halifax Clarity.