How much do draw cash on a c card?

They generally charge you interest on the cash from that date of withdrawal. Paying it off at the end of the month won't stop this. You'd need to ask your CC provider for the exact rate, but your 19.5% sounds about right!

Rob Graham

Is the rate of 19.5% per year or per month?

If I purchase goods to the value of £50 and draw £300 the next day, than pay £300 to my Card in a week, I will only accrue interest for 1 week on the £300?

Is the rate of 19.5% per year or per month?

Per year.

If I purchase goods to the value of 50 and draw 300 the next day, than pay 300 to my Card in a week, I will only accrue interest for 1 week on the 300?

Basically, yes.

Rob

In message , Rob graham writes

Can I advise caution as I think that there may be another charge for drawing the cash as well as the interest.

I don't have a HSBC card so don't know the precise terms they apply but based on what happens elsewhere I think that if you draw cash you could be charged a Cash Advance Fee which is a percentage of the sum drawn as well as the interest.

With some cards cash withdrawals will incur interest based on the annual rate plus something like a 2 or 3% cash advance fee. Best to ask them and get an answer from an authoritative source if it is important to you.

Yup - AFAIK all credit cards charge a fee as well as immediate interest, and the fee will be much more than the interest if you pay it off after a month.

Basically cash advances on credit cards are a complete rip-off, they used to good value (eg Nationwide used to charge just a 0.5% fee and no interest at all if you paid your statement in full), but providers have all increased their charges to silly levels now.

You're much better off arranging an overdraft, you can often do this on internet banking or over the phone and get the overdraft pretty quickly, sometimes immediately.

...on a *cash* advance? You jest.

, but providers

Yet when a senior executive of Barclays Bank pointed this out (it was something along the lines of "only a prat would borrow money in this way"), he was castigated by the press and MPs alike. And that was

Absolutely. I used to use my Nationwide CC as the way to get cash abroad, all I *ever* paid was a 0.5% fee, never any interest. It was an excellent way of getting cash abroad. But since about 5 years ago they've upped the fee massively and started charging interest too. So I now use a flex account.

Most other CC's used to *either* charge immediate interest *or* charge a fee. Now all (AFAIK) do both.

Yes, for selling a rip-off product!

What increase in charges? I've not seen any increase in any of my CC (or indeed banking) charges, and nor should anyone who has "used their brains".

No necessarily! You need to read the small print. Most CC providers have rules about where the money goes when you only pay off *part* of the outstanding debt - and these rules are usually geared towards leaving unpaid those parts which will nett the provider the greatest amount of interest!

As others have said, watch out for a withdrawal fee in *addition* to the interest.

Rubbish! He was truthfully stating that credit cards are NOT designed for borrowing cash.

Ah, so your interest rates, should you be unwise enough not to pay your balance in full, haven't increased, nor have more restrictive terms (or perhaps a wider definition) been applied as to what constitutes a "cash" advance?

It doesn't make any difference to me, but many are being caught by the changes in terms and conditions introduced over the last 12 months.

designed

Then why do most credit cards encourage it (eg through 0% balance transfers etc).

Er, your proviso (and mine) was "regardless of whether they used their brains or not". Anyone who uses their brains does not borrow at typical CC interest rates. They find a much cheaper way of borrowing if they need to.

Again - anyone who "uses their brains" will not now take a cash advance (or a transaction which is treated as one).

Yes. those who haven't "used their brains".

Basically they used to rip off the stupid through penalty charges, they are now ripping of the stupid by other means. But if you're not stupid you can avoid most if not all the new rip-off's.

Bait for the feckless! It isn't interest free forever and, as I've previously mentioned, there are changing terms and conditions, so even the "0%" transfer option loses its attractiveness when a 3% "transfer" fee enters the transaction. Those who use the facility have already dug a hole for themselves and will suffer for it by high rates of interest at some stage - when they could (possibly) have arranged a personal loan from a bank at much, much lower cost!

The other problem is that with a balance transfer, when used on a card that is also in use for day-to-day purchases, will they be aware of how any repayments are applied to the outstanding total balance? This could be of crucial importance when the end of the "interest free" period expires.

You can't, however, lives people's lives for them as they have to accept, at some stage, that they are responsible for their own actions.

Exactly.

Which shouldn't be a problem, *provided* they actually read the amendments to the terms and conditions when they arrive with a statement. For example, paying Vernon's Pools by credit card is now classified, with some card companies, as a "cash advance".

Which was the point I was trying to make.

The £300 repayment will be allocated £50 to the purchase and £250 to the cash withdrawal, so you will continue to pay interest on £50 of cash after the repayment.

Also, cash withdrawal interest is usually at a higher rate than purchase interest.

Also, there is often a cash withdrawal fee.