“ Financial Institution: Halifax / Type: Credit Card „
Up until recently when I was travelling overseas it was relatively easy for me to get money exchanged without being ripped off. I have a Nationwide Flex account and was able to use this account to get money free from charges at ATMs and at a fair rate.
Unfortunately a couple of years ago the Nationwide phased the benefits of the Flex account out, leaving me looking for an alternative. I tried a Caxton FX pre-paid Mastercard but the problem with that is you have to load at a specific rate and if the rate goes up later on then tough. You also have to load a certain amount and if it runs out and you don't have access to the internet to load more you might be in trouble.
What I really wanted was a credit card which would offer free cash withdrawals, zero commission on purchases and a true exchange rate. Such a credit card used to be pretty common but in these credit crunched times I have found more and more card companies are slipping in charges on the sly which if you are not careful you won't spot until it's too late.
I learned this to my cost last year when I purchased a small item from a French website using another credit card only to be hammered with additional charges - something that had never happened to me with a credit card before. I was so disgusted that I decided to do a little research and find a card I could use abroad that wouldn't cost me the earth. During this research it became patently obvious to me that the best credit card for using overseas is the Halifax Clarity card.
You can apply for a Halifax Clarity card in a branch or online. It is a Mastercard and it offers the following benefits to users:-
* No fee to transfer a balance
* No cash withdrawal fee
* No fee to use it anywhere worldwide
* No annual fee
When I applied this card was offering rewards for qualifying customers - so if I spent £300 in a month I would get a £5 reward.
While the lack of fees - particularly for overseas use - was the main carrot which led me to this card, it was qualifying for the monthly reward that sealed the deal for me.
~~Applying for the Card~~
As an existing Bank of Scotland Ultimate Reward account holder, it was simplicity itself for me to apply for this card. I did so via online banking and the process took about five minutes with the decision given then.
My status as an Ultimate Reward account holder also qualified me for the reward feature on the card. I have done a little research and I am unsure if the reward feature is still offered to new customers however - so it looks like I applied in the nick of time.
You can apply for the card over the phone or in a branch too.
The card itself took just over a week to arrive, with the PIN code arriving a few days before. The account was added to my online banking within a week or so of my application being approved too.
I try to limit my use of credit cards and rarely carry a balance over but I knew when I got this card it would get something of a hammering on my holiday. I took the precaution of calling HBOS card services before I left to inform them I would be overseas to ensure my card would work for the duration of my trip and to ensure I wouldn't be plagued with phone calls from their fraud department. I would recommend anyone do this when planning on using a credit card overseas of course - whether it be a Clarity card or not.
I first used the card to make a fairly large cash withdrawal at Newark Airport while we were on a layover waiting for our connecting flight to Las Vegas and this went without a hitch. I was relieved about this as I had initial fears that the card would be refused leaving me to use another card which would cost me more to use.
I actually had no problems using the card at all - although I did make one mistake on my travels, and that was to use the card as security when staying in hotels - nothing is actually taken from your card during these stays but a freeze is put on your card. This led to my credit limit depleting towards the end of my stay despite the fact I hadn't actually spent the money and the hotel rooms had all been paid for in advance. I had a similar deposit put on the card when I hired a car and it took nearly a week for this money to "unfreeze".
Had I considered this more I would have used a different card purely for this purpose. I have a credit limit of just shy of £1500 on my card which I thought would be more than adequate for the holiday but at one point I was only able to withdraw $50! So if you are planning on using this card purely for travels it might be worth asking for as large a credit limit as possible.
As the card is Mastercard I found it was accepted everywhere and I had no problems at all using it either in stores in the US - although it's worth noting you will be asked for photo ID when using a credit card for shopping - or at ATMs.
Managing your account is easy - you can do it online. Unfortunately I wasn't quite as organised as I should have been - despite contacting the credit card department of my bank before I left, I didn't realise that HBOS will block your internet banking if they spy you are logging in from a different country. This led to a few expensive phone calls on my mobile to rectify the situation. Once I had sorted out the problem I was able to clearly see what I had spent and what exchange rate I was getting when I logged into the internet on my netbook.
I had loaded my Caxton FX card up with $500 a couple of days before I left and got a rate of $1.58. The lowest rate I got on my Clarity Card was $1.62 and some days the rate was $1.63.
When I got home and all transactions appeared on my account online, I was able to clearly see what I had spent and how much it had cost me. Each transaction was also clearly marked with the exchange rate.
The only charge made on a total of £1127 spent on the card was interest of £2.32 on the cash withdrawals I made totalling £580.23. You pay interest on all cash withdrawals with this card from the minute you take the money out but purchases are interest free so long as you pay your bill in full every month. When I got my statement, I got the £5 reward for spending more than £300 so I effectively got everything interest free.
You can pay your bill online, by post, over the phone or in a branch. I haven't set up a direct debit for the minimum payment but this is an option you can consider. I pay online and my only quibble is the Faster Payments system doesn't work on HBOS credit cards so do bear this in mind and pay your bill in good time to avoid late payment charges. I find a payment usually takes about 3 or 4 working days to show on my account.
As the rewards aspect of this card seems to have been phased out, I would recommend this primarily as a card for travelling. My sister used a Barclaycard while on holiday and she was charged 2.6% on every transaction she made which soon added up on a final bill of £1,000 - and that was purely on purchases. My total charge of £2.32 seemed miniscule in comparison.
The application process is painless and quick so if you have a holiday planned in the next month or so and are looking for a reasonably cheap way to get money and buy items when overseas then I would recommend you consider this card.
My only caveat would be to ensure you have a fairly high credit limit to cover those freezes on your card that hotels and car hire companies can impose and to ensure you contact Halifax before you go to inform them you will be overseas. I was told their fraud department are pretty hot at contacting you if your card is used overseas and you haven't told them and certainly my experience with the HBOS website while abroad would back this up.
I would also stress that as with all credit cards, it works best if you don't carry a balance over - if you do this you will find it's one of the most expensive ways to borrow money.
I have been impressed with this card and will keep hold of it for as long as Halifax offer the benefit of being able to use it worldwide free of charge. I am aware that this can change - my experience with my Nationwide Flex account acts as a stark reminder of that - but for now this card probably offers the cheapest way to get money when you are travelling or if you are buying something from an overseas website.
I shan't list the interest rates Halifax charge on this card - although it's worth saying that what they charge you will vary depending on your circumstances. You can find this out, along with charges Halifax make should you miss a payment or for other services on the Halifax website by clicking the link below.
I applied for a Halifax Clarity Credit Card on the Halifax website and got accepted. I think my chances were pretty good anyway as I already had the Halifax 'Reward' Current Account in good standing (plus I've been offered it in branch previously), so the only thing I was worried about was getting a low credit limit. Surprisingly, Halifax gave me a limit over £5K but I'll never use that much. Not just because I don't want to get into debt but also because if I spend over a certain amount, it starts becoming less profitable (I'll explain later). Applying was just a case of clicking a button on the Halifax site and then putting in a few details such as earnings. I didn't have to enter much as I already banked with Halifax and was logged into my account whilst doing it. About a week and a half later, I got my funky new card in the post, followed by PIN number and welcome letter. Had to do the usual phone up to activate card, which is annoying as you have to speak to a salesman who will in turn try to sell you something.
REASON FOR CHOICE
I already hold six other credit cards from various other financial institutions, so why did I want to get the Halifax Clarity Credit Card? One word ... "Cashback!" (or is that 2 words?). I only ever apply for cards for the rewards of if there was a good offer somewhere for me. i.e. balance transfer, 0% on purchases if I wanted to buy something expensive, never for more credit. The Clarity card was no different.
On its own, the Clarity card has nice features such as no cash withdrawal fees and no foreign transaction fees, no balance transfer fees, which are pretty unique for a credit card already but if you happen to also hold a Halifax Reward or Ultimate Reward account, they give you £5 cashback each month you spend £300 or over on the card! Buying things just to reach the £300 threshold is a false economy but I found I usually spend more than that anyway on my other cards.
I've had the card for 2 months now and use the Clarity in conjunction with my Egg World Mastercard (which gives 1% cashback) and my Barclaycard Platinum (which gives 2% for petrol and supermarket spending, 0.5% for everything else). Getting £5 from a £300 spend, works out to 1.67%. However, if I were to spend way over the threshold, I'd be worse off. E.g. I spend £500 on the Clarity and get the fixed £5 cashback, it works out to just 1% cashback. I would be better off spending £300 on the Clarity and then £200 on the Egg Card (1% cashback) or Barclaycard (2% petrol and supermarket) depending on where I'm shopping. This is assuming its multiple combined purchases rather than one big purchase totaling £500.
MANAGING THE ACCOUNT
The account can be managed online, phone, post, ATM or in branch, as you'd expect from a high street bank. I tend to pay my bill online but sometimes write a cheque when the statement comes through the post. I've also set up a Direct Debit just in case I forget to pay. The website is easy to use but may take a bit of getting used to as they recently redesigned the site. The option to pay money into the credit card account from my current account was automatically added when I added my card to my online banking account.
As with any credit card account, it is imperative that you pay on time and stay within the credit limit, otherwise you could mess up your credit rating as well as get hit with a fine. Halifax charge a £12 penalty for each of these offences, which is expensive but you need only stay within limits and keep up payments (even if only the minimum amount).
When logged into my account, I saw that I have options to have an additional card holder, change the billing date (can be changed twice per 6 months or pay £5 fee), request new credit limit, etc. All important information on how to pay, fees, etc are also easily found.
With my trying to achieve the 'spend £300 without going too much over' target each month, I like to keep a close eye on the balance by logging into my Halifax online banking account to view the balance, which brings me to something I don't like about the card. Transactions do seem to take longer to show up on the account. If I buy something with card, the transaction doesn't seem to show up for a few days. However, the date of the transaction when it finally does show up, is backdated to the actual date of the transaction or next working day if it's a weekend/holiday. Payments to the card are credited next working day but this was not always the case. The banks have upgraded so Faster Payments work with credit card payments so that's good. Payments, however, aren't paid via the credit card account with a debit card like other cards. You have to either use the paper statement giro credit or send the money direct from another bank account, which is a bit silly and leaves more room for errors. i.e. sending to the wrong account.
- £5 Cashback every month you spend £300 and above (gets credited as soon as the the month's statement is available)
- No cash withdrawal fees
- No foreign transaction fees
- No balance transfer fees
- No Annual Fees
- £5 reward only open to those with a Halifax Reward / Ultimate Reward Current Account
- Need self control as it is still a credit card
- Need to pay off bill in full each month to make it worthwhile
- Need to spend around the £300 for maximum value. Any more and the percentage cashback works out to be less.
- Transactions slow to appear
- Payments to the card need to be sent by BACs or via the paper statement by post or in branch.
I know some people consider credit cards to be evil but they are a necessary evil for some, and a useful financial management tool for others. For me, it's the latter, and a way for me to profit from the card companies instead of the other way around! I can definitely recommend the Clarity card, especially if you have a Halifax Reward account and have complete control of your spending and no expensive debts. If you buy from abroad a lot, this card avoids the foreign charges. If you need to withdraw cash from a credit card, this card may be a cheaper option at the point of withdrawal as there's no 3-4% (£3-£4 minimum) as well as a cheaper interest rate but interest is charged immediately like other cards so I don't recommend it for that unless you're desperate. For balance transfers, there's no fee but there's also no 0% period for the transfer so unless you have a balance on a more expensive credit card AND you can't get a hold of a 0%, then it may not be worth it as you'd be paying the 12.9% interest on the Clarity card right away. For everything else and when combined with a different reward card, it's excellent if used properly and sensibly. Highly recommended (but not to everyone).
Thanks for reading!
* Information accurate as at 24/01/2011
Fees and charges for your information
* Missed / late payment - £12.00
* Returned payment - £12.00
* Exceeding card spending limit - £12.00
* Stopped credit card cheques (excludes lost or stolen cheques) - £10
* Duplicate card statement - £5
* Statement date change - £5
* Foreign currency payment - £10