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Halifax Clarity T&C change - interim manual payments now not accounted for?

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Satsuma
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Halifax Clarity T&C change - interim manual payments now not accounted for?

#156780

Postby Satsuma » August 2nd, 2018, 3:13 pm

(I am happy to be told I have completely misunderstood this...)

Got a letter advising of a change in T&Cs on the Halifax Clarity credit card, in particular regarding manual payments on a balance (see end for exact wording).

- When I'm abroad, I make a number of ATM withdrawals which is a transaction that attracts interest.
- As soon as I see the transaction hit my Clarity account, I manually transfer the money over to pay it off, specifically to minimise any interest accrued.
- The Direct Debit then simply collects any residual amount due, so the balance is fully cleared each month, one way or another. Job done.
- NOTE: Statements currently confirm that manual payments will always be applied to the highest interest-bearing transactions first (which basically means the ATM withdrawals, as online/shop transactions are interest-free if cleared same month).


With this change, my reading of it is:
- Any manual payments made will be disregarded and left in 'limbo', and the DD will take the full statement balance.
- e.g. you spend £500 in a month, manually pay £250 halfway through, they will still take £500 DD.
- NOTE: Statements currently confirm any such manual payments received >2 working days prior to the payment date will reduce/stop the DD as necessary.

With me so far?

The customer services person agreed with my interpretation after checking with other colleagues. So I escalated the query and ended up on a phone call with a rep who was trying to be helpful but more or less just kept repeating that I wouldn't pay any interest at all if I cleared the full balance each month. But that would = fee-free, interest-free cash worldwide, which is not the case?

So far I have been given two "solution" options, neither of which seem very sensible:
1. If I were to make any manual payment, onus is on me to call and organise a refund (even though manual payment would be pointless as ignored and then taken again by DD)
2. Cancel the DD entirely/change it to min amount only and make manual payments to clear every month (this just seems unnecessarily tedious/reliant on my memory!)

So how do I achieve my goal of minimising interest payable on the ATM withdrawals - or is maximising it their goal?!

This all just seems bizarre. Can any Lemons make head or tail of this (or explain where I am misunderstanding things)?

Sats

=============================
LETTER WORDING
“After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced....This change means that any additional payments to your account will no longer affect your direct debit payments, helping you pay off your balance more quickly.”

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156781

Postby PinkDalek » August 2nd, 2018, 3:24 pm

Satsuma wrote:So how do I achieve my goal of minimising interest payable on the ATM withdrawals - or is maximising it their goal?!

This all just seems bizarre. Can any Lemons make head or tail of this (or explain where I am misunderstanding things)?

Sats


I think I've understood and what you are doing should still minimise the interest charged on your cash withdrawals (depending on the precise terms for that issue).

What I don't follow is what their message says. If they still collect the £500 by DD, as per your example, will that not put you in credit (debit in your books but I know you'll understand what I'm saying)? I thought credit cards were not allowed to be used in such a manner, even if it is the DD that has caused this.

Edit: Maybe if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced that relates to payments between advice and the DD date but I see raptor has now said the same thing.
Last edited by PinkDalek on August 2nd, 2018, 3:29 pm, edited 1 time in total.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156782

Postby Raptor » August 2nd, 2018, 3:26 pm

I read it to mean that once they send you a statement with a DD date and payment any manual payments received after that will not change the DD payment. So if you make a payment before the statement then the dd will be based on the remaining amount.

What used to happen, so I am told, was that if you made a mnaual payment after the statement date the DD would be reduced by that payment. Cannot confirm as never made any interim payments.

Raptor.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156786

Postby Satsuma » August 2nd, 2018, 3:40 pm

PinkDalek wrote:What I don't follow is what their message says. If they still collect the £500 by DD, as per your example, will that not put you in credit (debit in your books but I know you'll understand what I'm saying)? I thought credit cards were not allowed to be used in such a manner, even if it is the DD that has caused this.

Edit: Maybe if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced that relates to payments between advice and the DD date but I see raptor has now said the same thing.


Yes, it would do exactly that, which is crazy. I would have extra credit over and above my normal limit. They say I could just call up and get refunded (but what is the logic in that?). It also begs the question of what happens to my manual payment if it is not applied to the balance. Where does it go? (I'm talking about a named and numbered account where I can make direct payments to it, not to a general Clarity holding account they distribute from)

And I am talking about extra payments made well before the cutoff date before the automatic DD can no longer be adjusted (usually 2-3 days prior)

Raptor wrote:I read it to mean that once they send you a statement with a DD date and payment any manual payments received after that will not change the DD payment. So if you make a payment before the statement then the dd will be based on the remaining amount.

What used to happen, so I am told, was that if you made a mnaual payment after the statement date the DD would be reduced by that payment. Cannot confirm as never made any interim payments.

Raptor.


Well for a start there are several days between them generating the statement and it landing on my doormat so that takes out a good 2-3 weeks of a statement period - the day the generate it > day it gets mailed > transit > arrives with me > due date some days/weeks hence.
(in any case, nobody has said that - they have only said it means any payment on any date.)

I have only made payments up till about 2-3 days before DD date as well.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156787

Postby Watis » August 2nd, 2018, 3:48 pm

“After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced....This change means that any additional payments to your account will no longer affect your direct debit payments, helping you pay off your balance more quickly.”

I understand it to mean that the Direct Debit will not be reduced where there will still be an outstanding balance after the full Direct Debit has been taken.

So, if your Direct Debit pays off the outstanding balance in full, then it will be reduced to that balance - or you would be put in a credit position.

Remember that many (most?) credit card accounts are not settled in full every month. Not everyone out there is a Fool!

Watis

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156791

Postby swill453 » August 2nd, 2018, 3:57 pm

Satsuma wrote:LETTER WORDING
“After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance ...”

I think the "towards your balance" is possibly key here. You don't have a DD set up to make payments towards your balance, you have one set up to clear your balance.

So maybe the change doesn't apply to you at all, and things will carry on exactly as before.

Scott.

EDIT: I think I just repeated what Watis said.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156794

Postby PinkDalek » August 2nd, 2018, 4:02 pm

That would make sense, especially if it were a fixed payment DD (which isn't the case for sats) as per Barclaycard:

http://help.barclaycard.co.uk/brochure/ ... l-payments

If I have a Direct Debit set up, can I still make additional payments?

If you choose to make an additional payment against a fixed payment Direct Debit, the fixed amount will still need to be taken in full.
But if you make an additional payment against a minimum payment Direct Debit, then your Direct Debit payment will go down by that amount. ...

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156798

Postby Dod101 » August 2nd, 2018, 4:17 pm

I have used the Halifax card and was unwise enough to withdraw local currency cash using it and could not understand the charges, even after apparently paying off the entire balance by DD. I now minimise my use of foreign currency cash but if I need some I use my UK MasterCard Debit card. Otherwise I use the Clarity card for most purchases. I agree with the OP if you call them for clarification they are not very good if the answer does not come up on their screen, I assume.

Dod

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156841

Postby pochisoldi » August 2nd, 2018, 9:38 pm

My clarity card gets used for all foreign transactions including a regular monthly payment, which comes somewhere between £6 and £8.
I used to have a full balance DD taking advantage of the "if you pay early we'll reduce your DD" clause.
This works fine if you never use the card for cash, but I want to have my cake and eat it:
Dod101 wrote:I have used the Halifax card and was unwise enough to withdraw local currency cash using it and could not understand the charges, even after apparently paying off the entire balance by DD. I now minimise my use of foreign currency cash but if I need some I use my UK MasterCard Debit card. Otherwise I use the Clarity card for most purchases. I agree with the OP if you call them for clarification they are not very good if the answer does not come up on their screen, I assume.

Dod


Note: if you don't clear you balance in full, you can skip the rest of this post...

The technique for minimising the interest on cash withdrawals is to wait until the withdrawal was actually posted to the account, and then pay off the previous month's balance in full (if you haven't already done so), plus the amount of the cash withdrawal.
This then leaves any purchases you made since the last statement sitting on the card at 0%.

With a full balance direct debit, under the old regime this meant that your next statement balance would be your purchases plus a few pennies in interest, and just under a month to pay £250.

Under the new regime, you could end up paying up to 2* last months balance + cost of cash withdrawal in one statement month, and potentially nothing the following month, a potential disaster for the cashflow situation.

Anyone who might use a Clarity card for cash withdrawals, shouldn't be using it in the UK for anything other than emergencies.
(UK spending should go on to a cashback/reward card)

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156851

Postby Dod101 » August 2nd, 2018, 10:35 pm

Thanks pochisoldi. I was using my Clarity card to withdraw cash in Melbourne, a long way from the UK but I take your point and will try this next time.

Good for you; taking your card and eating it, I appreciate that.

Dod

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156876

Postby GoSeigen » August 3rd, 2018, 8:14 am

pochisoldi wrote:My clarity card gets used for all foreign transactions including a regular monthly payment, which comes somewhere between £6 and £8.
I used to have a full balance DD taking advantage of the "if you pay early we'll reduce your DD" clause.
This works fine if you never use the card for cash, but I want to have my cake and eat it:
Dod101 wrote:I have used the Halifax card and was unwise enough to withdraw local currency cash using it and could not understand the charges, even after apparently paying off the entire balance by DD. I now minimise my use of foreign currency cash but if I need some I use my UK MasterCard Debit card. Otherwise I use the Clarity card for most purchases. I agree with the OP if you call them for clarification they are not very good if the answer does not come up on their screen, I assume.

Dod


Note: if you don't clear you balance in full, you can skip the rest of this post...

The technique for minimising the interest on cash withdrawals is to wait until the withdrawal was actually posted to the account, and then pay off the previous month's balance in full (if you haven't already done so), plus the amount of the cash withdrawal.
This then leaves any purchases you made since the last statement sitting on the card at 0%.

With a full balance direct debit, under the old regime this meant that your next statement balance would be your purchases plus a few pennies in interest, and just under a month to pay £250.

Under the new regime, you could end up paying up to 2* last months balance + cost of cash withdrawal in one statement month, and potentially nothing the following month, a potential disaster for the cashflow situation.

Anyone who might use a Clarity card for cash withdrawals, shouldn't be using it in the UK for anything other than emergencies.
(UK spending should go on to a cashback/reward card)


Haven't the foggiest what all this means.

Assume I pay off my balance in full each month.

Please could someone explain why, if I use the clarity card to draw cash (either in the UK or abroad), I cannot simply transfer an equal amount to the card after the transaction hits the account to clear the cash withdrawal balance. Interest would be payable only on the couple of days after the cash withdrawal until the transfer in and not at all on any retail payments. If not, why not?

GS

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156877

Postby swill453 » August 3rd, 2018, 8:19 am

GoSeigen wrote:Haven't the foggiest what all this means.

Assume I pay off my balance in full each month.

Please could someone explain why, if I use the clarity card to draw cash (either in the UK or abroad), I cannot simply transfer an equal amount to the card after the transaction hits the account to clear the cash withdrawal balance. Interest would be payable only on the couple of days after the cash withdrawal until the transfer in and not at all on any retail payments. If not, why not?

I agree with that. It's certainly how my Santander Zero card works, and my understanding is that Clarity is the same.

Scott.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156883

Postby vrdiver » August 3rd, 2018, 8:44 am

Mrs VRD and I used a Santander CC and a Clarity CC abroad recently. I was surprised that the Santander exchange rate (€:£) beat the Clarity card on each transaction over a couple of days, having been under the impression that the Clarity card was the cheaper option when abroad.

The only thing I plan to use it for now is ATM cash withdrawals (when abroad). For the sake of a few pennies and a bit of forward planning, even that use may get scrapped, especially if the new rules make avoiding interest payment by early repayment impossible.

VRD

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156884

Postby Satsuma » August 3rd, 2018, 8:50 am

GoSeigen wrote:
Assume I pay off my balance in full each month.

Please could someone explain why, if I use the clarity card to draw cash (either in the UK or abroad), I cannot simply transfer an equal amount to the card after the transaction hits the account to clear the cash withdrawal balance. Interest would be payable only on the couple of days after the cash withdrawal until the transfer in and not at all on any retail payments. If not, why not?

GS


Yes, this is what I do and as far as I understand the wording on current statements, exactly how it works (although I tend to pay off ANY amount that hits - retail/restaurant/ATM etc - just for ease. So I always return home with a near-zero balance, bar a few last min transactions at the airport etc).

Current/pre-change statement wording:

"one-off payments received 2 clear working days before the day your payment is due will reduce or stop the DD from leaving your account that month"


and

"We use your payments to pay off balances charged at the highest interest rate first and so on down to balances with lowest interest rates."



The new policy as per my OP has been explicitly called out as a change, but nobody at Clarity has yet been able to definitively confirm what the wording means, despite the fact there are clearly multiple possible interpretations of it. I don't see how this got through the necessary Compliance checks tbh! So far all they've "confirmed" is that "it" is a new policy and (probably/definitely) won't be changed. But they can't explain what "it" is!!

I will be going abroad just before the new policy kicks in so will carry on as always with the manual payments. After that I don't anticipate going away till next year so maybe some other Lemon will be able to test this out after the switchover?

Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156885

Postby swill453 » August 3rd, 2018, 8:51 am

vrdiver wrote:especially if the new rules make avoiding interest payment by early repayment impossible.

They can't do that, it would be breaking the law.

If you make a payment, it goes towards repaying the highest interest part of your balance, end of story.

What happens to your Direct Debit after that is (possibly) a minor complication, but it won't increase the interest you have to pay.

Scott.

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156886

Postby Satsuma » August 3rd, 2018, 8:58 am

For those of you with Clarity cards:

1. Have you had the same letter?
2. Do you have the same interpretation regarding paying off balances before the full/remaining balance is collected by DD?
3. Can you summon up the will to call them and ask the same questions as me? (It always seems to be a long wait because they are "very busy" when I call - whether that is 2pm, 2am or dark side of the moon o'clock. Funny that....)

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156887

Postby vrdiver » August 3rd, 2018, 9:06 am

swill453 wrote:
vrdiver wrote:especially if the new rules make avoiding interest payment by early repayment impossible.

They can't do that, it would be breaking the law.

If you make a payment, it goes towards repaying the highest interest part of your balance, end of story.

What happens to your Direct Debit after that is (possibly) a minor complication, but it won't increase the interest you have to pay.

Scott.

Fair point. But actually it's worse - if the new rules mean I overpay, then for me (as an infrequent/casual user) I may end up with a positive balance at the end of a trip that won't take care of itself the following month...

Satsuma wrote:1. Have you had the same letter?
2. Do you have the same interpretation regarding paying off balances before the full/remaining balance is collected by DD?
3. Can you summon up the will to call them


1. I haven't had the letter (or have, but binned it as junk mail?).
2. Since I have a variable DD set up to repay in full, I'm wondering if the interpretation of the new term is that it applies to fixed payment DDs only?
3. No :oops:

VRD

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156896

Postby pochisoldi » August 3rd, 2018, 9:41 am

GoSeigen wrote:Assume I pay off my balance in full each month.


When and how? By bill payment Before you go away? By full balance DD on the due date?

GoSeigen wrote:Please could someone explain why, if I use the clarity card to draw cash (either in the UK or abroad), I cannot simply transfer an equal amount to the card after the transaction hits the account to clear the cash withdrawal balance. Interest would be payable only on the couple of days after the cash withdrawal until the transfer in and not at all on any retail payments. If not, why not?
GS


Ignoring the "manual payments won't change your direct debit amount" change.

Assuming you have nothing on a promotional interest rate,

Payments are applied in the following order:
Anything remaining from last month's statement balance on which interest is paid.
Anything remaining from last month's statement balance at 0%
Anything since the last statement on which interest is being paid (=Cash withdrawals)
Posted purchases from this month
Towards any pending items.

To illustrate this:

The month before last you cleared the bill in full, so no interest is being paid on anything on last month's statement.
Last month's balance was £200
You spend £150 on purchases
You withdraw £100 in cash

This means your account balance is £450, consisting of
£200 from last month (0%)
£100 on which interest is being paid (=cash)
£150 on purchases since last statement

Scenario 1: Just pay off the amount of the cash withdrawal
If you simply pay off £100, equal to the cash withdrawal transaction, your account balance then becomes £350 of which
£100 from last month (0%)
£100 on which interest is being paid (=cash)
£150 on purchases since last statement

You will end up paying interest on the £100 until you've paid a further £200.

Scenario 2: Pay off last month AND the amount of the cash withdrawal
You pay off £300, your account balance becomes £150
£0 from last month (0%)
£0 on which interest is being paid (=cash)
£150 on purchases since last statement (0%)

If you then make further cash withdrawals before the next statement is processed, then you can simply pay off the cash withdrawal.
If a new statement is issued, and the cash withdrawal is on that, all you have to pay off is last month's balance
If the new statement doesn't show the cash withdrawal, you have to pay off last month +the amount of the cash withdrawal.

The two rules when clearing cash withdrawals:
1) You must wait until the cash withdrawal is actually posted to the account before making any payment
2) Pay off whatever's remaining from last month's statement + the cash withdrawal

If you don't do (1) then you will pay off last month's balance+this month's purchases
If you don't do (2) then you will only pay off some or all of last month's balance

If, in future, you are going to rely on the full balance direct debit to clear last month, and then make an additional payment to cover the cash withdrawal, you will still end up paying interest on all or part of the cash withdrawal until the day your full balance direct debit goes out, regardless of when you make that additional payment.

The method I've described has worked for me for the 7 or so years I've had the Clarity card, and I've never paid more than pennies in interest.

PochiSoldi

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156911

Postby Satsuma » August 3rd, 2018, 10:55 am

Very comprehensive PS, thanks.

But isn't the particular query I have a lot simpler if you are starting with a £0 balance? (I usually do as I have other cards I use in the UK)

So I start with £0 balance on the day I leave the UK for a sunny week abroad (assume this is all within one statement month)...

- I withdraw cash from an ATM when I arrive abroad. It takes 1-2 days to appear on my account, but as soon as it does, I transfer that amount over to clear it. A few pennies of interest may accrue here.
- Repeat above throughout trip (let's assume I don't make any card purchases for ease)
- I return home and the only transactions left to clear is a last minute card purchase of some airport snacks before I flew back.

As it currently stands, those ad-hoc payments made above will reduce the "full balance" DD payment down to just the airport snacks - Agree?

What the letter seems to be saying is those payments will simply be disregarded, and interest on the ATM withdrawals will continue to be accrued daily until the full balance (ATM cash + interest + airport snacks) is taken by DD at the end of the month.

The ad-hoc payments will presumably then sit as credits on my account (and can be "spent" on future transactions, or refunded if I ring up and ask) - although as pointed out, it's against the T&Cs to have a credit balance like this, so....?

For something so key, it seems to be extremely badly worded.
(Interestingly another unrelated section of the changes referenced a facility that - upon requesting it - was not possible on my account anyway! So the letter definitely is a generic one size fits all, and not tailored in any way)

Sats

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Re: Halifax Clarity T&C change - interim manual payments now not accounted for?

#156919

Postby swill453 » August 3rd, 2018, 11:43 am

Satsuma wrote:What the letter seems to be saying is those payments will simply be disregarded, and interest on the ATM withdrawals will continue to be accrued daily until the full balance (ATM cash + interest + airport snacks) is taken by DD at the end of the month.

I don't think it does say that, and as I said above I think it would be illegal for them to do that.

Repayments have to be applied against the highest interest balance. They can't simply ignore them until some future date.

Scott.


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