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

#156924

Postby Satsuma » August 3rd, 2018, 12:02 pm

swill453 wrote:
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.


(honestly not trying to be dog with a bone here...! :D )

But in my example, which is not atypical for my usage, I have paid off all the highest interest, yes?
So the only payment left is my airport snacks, which are [technically] interest-free anyway. And they'd be paid off asap too (before the DD is due).

So the balance is easily likely to be £0 by the time the DD date rolls round, even if I have racked up £hundreds in spending through the month.

But their own wording says: “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.”

It's either a case that the wording is phenomenally bad; or there is a much bigger change afoot - the usage of "no longer" means they are changing from what it currently is - that an additional payment WILL affect the DD..

(It may be that yours/someone else's(?) comment about it only applying to people who have a rolling balance and only make partial payments, but if so, that's back to it being phenomenally bad wording!)

What's most frustrating is the inability of Clarity to explain this to me, and it's their new policy! :(

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

#156931

Postby GoSeigen » August 3rd, 2018, 12:23 pm

Thanks pochisoldi for the very detailed post which has cleared up the confusion for me. I see that it comes down to my different understanding of the terms to him.

Here is an extract from the terms:

We will reduce the amount you owe in the following order:

any overdue amounts from previous statements; then
the remaining balance on your statement; then
any recent transactions not yet shown on your statement.


So the order is not as pochisoldi states but IMO:
1. overdue amounts [from previous statements]
2. remaining balance not just on the last month's statement but on the entire account statement -- including any recent transactions which have been added to the statement i.e. which are no longer "pending".
3. Unstatemented (i.e. pending) transactions.

Having read the above, posters may not still agree with my interpretation but it is my understanding and why I did not follow the earlier post(s).

Now applying the above to pochisoldi's example:



pochisoldi wrote:

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


I'd say:


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
£200 from last month (0%)
£0 on which interest is being paid (=cash)
£150 on purchases since last statement

because all statement entries which are not overdue have equal priority -- even recent spending not liable to be paid by the next payment due date.

Thus the cash balance gets paid off in priority to the retail balances because it attracts the higher interest.


pochisoldi wrote: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's method would work of course, but he is paying balances off earlier than he really needs to IMU.

GS

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

#157249

Postby AF62 » August 5th, 2018, 9:03 am

Can I suggest there is something in the wording which I cannot see has been mentioned so far and may be the reason for the change -

“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 assume that previously if you had a fixed amount Direct Debit but made an additional payment during the month that the fixed amount DD was reduced.

Is the change simply to help people reduce their debts, so those who have a fixed DD and make additional payments don't have the DD reduced so they pay off their debts quicker and pay less interest.

For those with full balance DDs however, if Halifax did do the crazy thing which is being suggested of either -
- Before the statement is produced not setting the full balance DD to take account of any additional payments; or
- After the statement is produced not adjusting the DD amount to take account of any additional payments made after it was sent out but before the DD was taken
then they would be frequently taking far more than is required, which they won't want to do as it will generate calls and requests to get it back.

So yes, I don't think it is very well worded but I think its aim is good and not the bad suggested.

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

#157540

Postby Raptor » August 6th, 2018, 4:21 pm

I thought that this may be something helpful and better explained. I only have 1 cc that I pay minimum balance (this is the first statement) and that is Virgin. On their statement they say:-

Please note we will still collect your Direct Debit even if you make additional payments


So I read through the "blurb" and this is only applicable if you do not pay off the full amount. It also says that any payments received pay off in the highest order of charges first. So seems to agree with Clarity.

Raptor.

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

#157593

Postby FredBloggs » August 7th, 2018, 12:31 am

Am I the only one mildly amused at the lack of clarity regarding the new terms at the Clarity card?

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

#157648

Postby pochisoldi » August 7th, 2018, 11:04 am

The taking of direct debits is quite clear.

Make an interim payment (or get a refund credited) to the card, and a direct debit for the amount shown on the statement will still be taken.

The only exception is if the taking the quoted amount will take the account into credit, in this case the direct debit will be reduced.

This is "good news" for people running a balance from month to month.

It makes no difference to people with a full balance direct debit who never withdraw cash.

It requires action for people who have a minimum payment direct debit as a safety net, and then make a full payment manually before the DD goes out, will have to change that manual payment to "statement balance" less "minimum payment", otherwise they will end up paying off a bit of their current month's spending early when the minimum DD goes out.

It's bad news for people who currently have a full balance direct debit, use their card for cash withdrawals abroad, and make an interim payment to avoid interest on the cash withdrawal, as it will mean that any purchases you make "this month" will get paid off early by the direct debit to cover "last month".

The simple solutions are one of the following:
  • Cancel the direct debit altogether and do a future dated bill payment for the statement balance
  • Switch to minimum balance direct debit, do a future dated bill payment for the statement balance less the minimum payment
    If you have a regular payment going out of the account which is > £5:
  • Switch to fixed amount direct debit, and when there's some extra spend, do a future dated bill payment for the statement balance less the fixed amount

Personally, I've gone for the "Switch to fixed amount direct debit".

PochiSoldi

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

#157730

Postby Satsuma » August 7th, 2018, 3:58 pm

pochisoldi wrote:It's bad news for people who currently have a full balance direct debit, use their card for cash withdrawals abroad, and make an interim payment to avoid interest on the cash withdrawal, as it will mean that any purchases you make "this month" will get paid off early by the direct debit to cover "last month".


^^ This is me.

But I don't think your assertion is right. Clarity clearly state that payments will be applied to transactions with the highest interest first.
So given purchases are interest free (if cleared in same statement month) and cash withdrawals are 18% (or something like that), if I make an interim payment, that will be allocated against the cash withdrawal first.

pochisoldi wrote:The simple solutions are one of the following:
  • Cancel the direct debit altogether and do a future dated bill payment for the statement balance
  • Switch to minimum balance direct debit, do a future dated bill payment for the statement balance less the minimum payment
    If you have a regular payment going out of the account which is > £5:
  • Switch to fixed amount direct debit, and when there's some extra spend, do a future dated bill payment for the statement balance less the fixed amount

Personally, I've gone for the "Switch to fixed amount direct debit".

PochiSoldi


Cancelling a DD and having to make manual payments sound likes the worst option! I like having automated payments to clear all my bills/cards each month, with no faff of having to top up or calculate what may or may not be due this month or that month.

I am still none the wiser from the horse's mouth though, so I will make a diary note to ensure my balance is £0 by the date of changes, and then do a full statement month of low£ test usage and interim payments just to see what happens in reality. Hopefully it is just bad wording! I will keep this thread updated on my findings...

Sats

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

#159566

Postby melonfool » August 14th, 2018, 3:39 pm

Are you sure there isn't an associated clause somewhere that says that they will not allow the card to go into credit? Most CC have this rule and, if they do, it negates the issue you foresee and supports the current status quo.

So, if you make a manual payment, then the DD is set to clear the *remaining* balance, they cannot adjust your DD to pay them an imaginary balance that puts you into credit.

I can see why they have done it as some people have debts they don't realise they will never pay off, they pay towards it, DD goes down, they haven't actually paid any more than they would have done. In fact, I think banks have been asked to do this.

Anyway, get a Monzo account!

Mel

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

#159689

Postby chas49 » August 14th, 2018, 9:47 pm

melonfool wrote:Are you sure there isn't an associated clause somewhere that says that they will not allow the card to go into credit? Most CC have this rule and, if they do, it negates the issue you foresee and supports the current status quo.

So, if you make a manual payment, then the DD is set to clear the *remaining* balance, they cannot adjust your DD to pay them an imaginary balance that puts you into credit.

I can see why they have done it as some people have debts they don't realise they will never pay off, they pay towards it, DD goes down, they haven't actually paid any more than they would have done. In fact, I think banks have been asked to do this.

Anyway, get a Monzo account!

Mel


There is:

You must not pay us more than you owe when you make payments to your account, or transfer funds from another credit or store card if this creates a credit balance on your account. If there is a credit balance on your account at any time, we may apply it to any recent transactions not yet shown on your account, or to transactions made after the date your account goes into credit. We may also return any credit balance to the account from which the money has been sent or pay the funds into a deposit account you hold with us. We do not pay interest on any credit balances or take them into account for the purpose of any reward schemes.


https://www.halifax.co.uk/creditcards/h ... rity-card/

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

#159691

Postby melonfool » August 14th, 2018, 9:51 pm

There you go, all sorted then!

Mel

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

#159701

Postby paulnumbers » August 14th, 2018, 10:37 pm

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


Simple, grab a starling card (bank account with debit card) instead and pre-load it with the cash you need, or load it via faster payments during your travel.

https://www.starlingbank.com/

It is also mastercard and has no fee's other than the mastercard spread, just like Halifax Clarity. The trendy youngsters seem to love it.

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

#160075

Postby Satsuma » August 16th, 2018, 10:31 am

Thanks for the suggestion, but I don't want a prepaid card. My spending on it is very variable which is part of the convenience of having credit.

Once upon a time I worked in financial services marketing. I remember the struggles I had with my compliance team who insisted on everything being absolutely categorical and unambiguous (and all I was trying to do was get leads for a sales team, not changing T&Cs!).

So the fact this has generated several differing POVs is concerning in itself.

As it is, it doesn't look like Clarity are going to contact me again (despite a clear promise to do so), and I am not sure I have the energy to try again. Not to mention that the changes are a done deal now anyway (whatever they are!). So I guess I'll just have to wait for my next overseas trip after Sep 21st - where i will continue with my manual payments throughout the month - and see what happens!

Sats


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