Credit card warning

Costly plastic

This is actually a general one, though I had the issue with Nationwide this morning. It’s all in the T’s and C’s of just about every credit card I’ve had, though. I just forgot about it.

When I was in Japan I had to take a cash advance on my Nationwide credit card. Normally I just use my debit/bank card in the ATMs but for some reason the one in the 7-Eleven near my hostel just wouldn’t accept it despite it having worked two days previously in the airport. Fortunately the same machine accepted my credit card. I knew I’d get hit for the cash advance fee, but I didn’t have much choice.

What I didn’t realise was that interest is accrued on these withdrawals/advances from the moment the cash is in your hand until the time you pay it off. This means that if you withdraw cash two days after you’ve just paid your monthly credit card bill you’ll be hit for 28 days’ interest on the next one.

The way round it is to get to the bank or pop online and use your internet banking. As soon as you can after the withdrawal, make a manual payment onto your credit card.

As it happened, I’d have been really stiffed if I’d not noticed the interest on my statement online. I’d had a large refund come through before the withdrawal which paid off my previous balance. As such, no direct debit dropped out of my bank account this month and so nothing was paid off towards the cash advance (which, I believe, takes “priority” over purchase debts on the card which is at least one bit of fairness in the whole thing).

As a rule, I never use cash advances if I can avoid it. I’d recommend sticking to the same principle. But if you have to, as I did, the simple rule is to pay it off as soon as you can.

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