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.


SUMMARY

PROS

- £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


CONS

- £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.


VERDICT

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