Interest On Cash Withdrawals From Credit Card

[iloveglee]

Can anyone answer this, because i don't seem to be able to get a comprehensible answer even from the bank. We have just returned from holiday, and have drawn some cash from our halifax clarity credit card. we do this regularly, and keep an eye for when it hits the card, then pay it off in full. We don't then usually make any other transactions, so no interest has had to be paid, apart from maybe a few pence if the cash hits the account a day or so earlier than i see it.

This time, we have had our card stolen, after we had made the cash withdrawal, so I paid off that amount, but being a contactless card, several transactions have been made even after we reported it stolen. They agree that they will repay this, but cannot say when. Consequently, there is a small outstanding balance.

What i cannot get an answer to, is whether we would be charged interest on the cash, even though we have paid off an amount equivalent to the cash, i.e.does the amount paid off get applied first to the cash, or would the total have to be paid to avoid interest. I am fairly reluctant to pay off the fraudulent amount, i don't want the bank to think we have accepted these transactions because we haven't.

I had not realised that contactless transactions can still be made, days after a stolen card is reported, and i wonder how many people do realise this. In our case, the amounts, 7 in all, were small, but in reality, these 7 could have amounted to the maximum allowed on contactless, 7x£30. We think the card was used almost immediately after it was taken, and way before we had the chance to report the theft. We reported it within half an hour of its loss, but could have been made to stand to £50 of those transactions. I personally think contactless cards, though i see their usefulness, are the worst thing ever to be brought out by banks.

[woofgang]

when I have had a card fraudulently used, the contested amount has been frozen by the card issuer pending the situation being sorted....ie while it appears on the account, no interest was charged and no other fees or penalty charges applied. They should be able to answer that question easily....I asked "so will you charge me interest on the frozen amount and will I be penalised for not paying it?" Both answers were no. I continued to use the account with a new card and just ignored the defrauded amount.

[bhg481]

Interest is charged on cash withdrawals from the date of the transaction, not the statement date; to save hassle I would pay off the total amount outstanding NOW since they have said they will reimburse the fraudulent transactions.
Halifax will happily change your cards for non-contactless ones - just ring their customer services.

[iloveglee]

I recognise that interest is charged from day one of a cash withdrawal, hence why i pay the cash amount off immediately. what i don't seem to be able to get a straight answer to is, would be interest be charged if i don't pay off the whole amount, even though some of the transactions were not cash, and aren't due to be paid for a few weeks.

i was always under the impression that any payments you make onto a credit card should always be first set against anything which attracts interest, or against anything which may have a higher interest rate than other balances.

Now i am not so sure so i think perhaps the best thing to do would be to pay it, and then eventually end up with a positive balance on the card. no-one is able to give me any answer as to when the fraudulent transactions will be repaid.

I will ask them also to send me a new card which is not contactless as it's not especially any benefit to me.

[bhg481]

If you look on your credit card bill it tells you exactly in what order payments are used for.
We have credit cards with Halifax and, when my replacement came through contactless, I asked them to replace it with a non-contactless one. They did with no problem but only MY card - I had to ask again for my wife's card on my account to be non-contactless as well. The message is: if you have more than one card on your account, be sure to ak that ALL the cards are replaced.

[iloveglee]

I have my bills online, but in the small print it does say payments are set against the transactions which have most interest on them, so presume that means the fraudulent transactions come under purchases. what is very disconcerting, that a week after we cancelled these cards, they are still being used. the bank can't tell us when this will stop, all we can do is keep an eye out and report the fraudulent ones and let them know. they will refund but this is all a bit of a pain. contactless cards have to go. strangely enough, we had 4 different banks cards taken, all of them allow the payments straight through onto the card, except santander, who keep them in pending payments, then gradually they disappear. not sure why this is.