Travel cash options, 28 degress question.

[Antony Parkin]

Hiya all, I have read a few of the discussions here about how to take your cash when you travel.

I am going to be travelling for around 12 months or more around asia and have budgeted around $50,000 AUD starting feb 2013.

I have on previous trips used my bank debit card but all the charges, $5 + 3% and local ATM fee on $50,000 works out at over $2000 during my trip just to access my cash!

I am looking at the 28 degrees card people advise here but notice it says interest on cash advances is 20.99% and that interest is charged from the date of withdrawal.

Does this mean when I withdraw cash I pay 20.99% interested even if I pay in full every month? If so is there a way to avoid this cost? 20.00% interest would calculate to be much more than using my regular bank debit card.

Sorry if this is a stupid question but all this financial stuff confuses me,

Thanks

Tony

 

[robd]

Hiya all, I have read a few of the discussions here about how to take your cash when you travel.

I am going to be travelling for around 12 months or more around asia and have budgeted around $50,000 AUD starting feb 2013.

I have on previous trips used my bank debit card but all the charges, $5 + 3% and local ATM fee on $50,000 works out at over $2000 during my trip just to access my cash!

I am looking at the 28 degrees card people advise here but notice it says interest on cash advances is 20.99% and that interest is charged from the date of withdrawal.

Does this mean when I withdraw cash I pay 20.99% interested even if I pay in full every month? If so is there a way to avoid this cost? 20.00% interest would calculate to be much more than using my regular bank debit card.

Sorry if this is a stupid question but all this financial stuff confuses me,

Thanks

Tony

Tony, there is lots of info on the 28 degree MC on this forum. I recently got one and have found it very useful for online purchases and will use it as no. 1 card when I go overseas for purchases, but not cash withdrawals. You must be very careful using this card for cash withdrawals, but following the advice on this forum, used correctly, it can also be great for cash advances without interest penalties, as long as you repay any credit and cash advances instantly. I will be getting a citibank debit visa account for cash withdrawals which is also a highly recommended card on this forum. Overall my reading of the recommended cards would be the 28 degree card for purchases and the CitiBank card for cash withdrawals.

 

[Isochronous]

Or you can just BPay the amount of the cash advance the day you take it out. One day of interest is usually only going to be a few cents in most cases and will always be better than any bank fee, and the exchange rate is also the best.

e.g. Withdraw $4,000, later that night you BPay $4,000 to the card. A day's interest will only cost you $2.

 

[robd]

Or you can just BPay the amount of the cash advance the day you take it out. One day of interest is usually only going to be a few cents in most cases and will always be better than any bank fee, and the exchange rate is also the best.

e.g. Withdraw $4,000, later that night you BPay $4,000 to the card. A day's interest will only cost you $2.

Again, be very careful. This will work as long as you have NOT MADE ANY CREDIT PURCHASES AS WELL.

 

[jgm]

Put the card into credit & use it as a debit card & there are no charges.

 

[Antony Parkin]

I didn't know it was possible to put a 'credit card' into credit. How does this work?

So I can upload say $10,000 from my australian account on to the card and it would function like the cash passport but without the loading fees and conversion %?

Same as a debit / bank card just with the same feature as the credit card? No ATM fees, no conversion % and top end currency rates?

 

[Fantic125]

I didn't know it was possible to put a 'credit card' into credit. How does this work?

So I can upload say $10,000 from my australian account on to the card and it would function like the cash passport but without the loading fees and conversion %?

Same as a debit / bank card just with the same feature as the credit card? No ATM fees, no conversion % and top end currency rates?

If you load that amount of money onto the card it will likely be frozen. Even though it is long, read the thread and all your questions will be answered.

 

[cove]

Antony if your credit limit is $5k keep the amount in credit at say a max of $4.5k in credit ever and then regularly do a BPay replenishment. That is how we do our card over the past couple of years....no fees, great exchange rates and cash advances from ATMs.

 

[MEL_Traveller]

Again, be very careful. This will work as long as you have NOT MADE ANY CREDIT PURCHASES AS WELL.

It STILL works if you make credit purchases.

Cash advances are entirely separate from credit.

If you have $2000 in debit from purchases, then withdraw $1000 on cash advances, only the cash advance accrues interest immediately.

If you pay off the $1000 the next day (not instantly) then you will pay one day's interest on the $1000.

If you pay the $1000 too early, the payment will come off your purchases, and not against the cash advance. So always wait 24 hours before paying the cash advance off.

Like the OP I was spending 9 months or more a year o/s. My tactic was to leave my money in a high interest account in AU. Take out cash overseas as needed, then transfer money from the high interest account to cover the cash advance. This is a much better option than topping up the card into credit as you get no interest.

 

[travelislife]

I would be using the Citibank Plus account for cash and just keep the 28degrees card for purchases and make use of the interest free period keeping your money in the bank.

As a side point I travelled for 2 years 3 months and used exclusively the NAB Gold Card (now discontinued) for cash, and the 28degreescard for purchases. Saved me a bundle. Also in Thailand make sure you use AEON ATMs to avoid the 150B fee if you can.

 

[serfty]

I didn't know it was possible to put a 'credit card' into credit. How does this work?

So I can upload say $10,000 from my australian account on to the card and it would function like the cash passport but without the loading fees and conversion %?

Same as a debit / bank card just with the same feature as the credit card? No ATM fees, no conversion % and top end currency rates?

Welcome to AFF.

The following thread has a lot of information about using the 28° Mastercard. There's some good links in the first post. These should answer your questions:

http://www.australianfrequentflyer..../28-wizard-mastercard-cash-advances-6960.html

 

[JohnK]

I believe there is some incorrect information posted in this thread.

If you have not used any of your credit limit and have made some purchases on the card the interest does not accrue until the date shown on next statement. If though you make a cash withdrawal, even $1, then you have just waived your right to interest free period on any current transactions on the card so you will then start paying interest on the purchases as well at the purchase rate. The only way to rectify it after a cash withdrawal is to pay off outstanding amount.

Not sure if there are any special conditions on this card but any repayments pay off lower interest rate transactions first. Is the case with most credit cards. So balance transfers, low rate purchases will always be paid off first and cash withdrawals last if you carry a balance on the card.

My credit limit is $5,500 and at a guess I have withdrawn close to $20,000 in the past month or so. Some of the withdrawals were off the credit limit but the rest has been with me balance transferring money onto the card and withdrawing the money slowly. The latest balance transfer was for $8,000+ and this has not frozen the card or triggered any suspicious activity.

They are still offering me a credit limit of $8,000 as I am a very good customer and kept a balance on the card for a couple of years but now just use it to launder my balance transfers and overseas transactions.

P.S I would have thought that cash withdrawals from Brisbane, Kingsgrove, Ayr and Brisbane in 4 consecutive days would have triggered some sort of alarm but it would appear to have gone unnoticed.

 

[MEL_Traveller]

I believe there is some incorrect information posted in this thread.

If you have not used any of your credit limit and have made some purchases on the card the interest does not accrue until the date shown on next statement. If though you make a cash withdrawal, even $1, then you have just waived your right to interest free period on any current transactions on the card so you will then start paying interest on the purchases as well at the purchase rate. The only way to rectify it after a cash withdrawal is to pay off outstanding amount.

Not sure if there are any special conditions on this card but any repayments pay off lower interest rate transactions first. Is the case with most credit cards. So balance transfers, low rate purchases will always be paid off first and cash withdrawals last if you carry a balance on the card.

My credit limit is $5,500 and at a guess I have withdrawn close to $20,000 in the past month or so. Some of the withdrawals were off the credit limit but the rest has been with me balance transferring money onto the card and withdrawing the money slowly. The latest balance transfer was for $8,000+ and this has not frozen the card or triggered any suspicious activity.

They are still offering me a credit limit of $8,000 as I am a very good customer and kept a balance on the card for a couple of years but now just use it to launder my balance transfers and overseas transactions.

P.S I would have thought that cash withdrawals from Brisbane, Kingsgrove, Ayr and Brisbane in 4 consecutive days would have triggered some sort of alarm but it would appear to have gone unnoticed.

sorry to disagree but what you have stated is not correct.

if you are in negative debit balance for purchases, and take out a cash advance, ONLY the cash advance accrues interest. The purchases continue to be interest free until the due date (assuming you have always paid in full and are not already accruing interest on purchases).

Secondly, the HIGHEST interest rate is paid first* (correction - see post below).

So if you have a purchases then make a cash advance, the money comes off the cash advance first.

This is different to some other cards, but not the way 28 degrees works.

taking out a cash advance in no way negates any interest free period for purchases.

(my apologies if there has been a change in policy in the last 30 days - it certainly hasn't been communicated to me by 28 degrees if the system now work in the way you describe).

 

[MEL_Traveller]

correction to my post above - it seems the interest rate is the same on purchases and cash advances?? (20.99% according to the FAQ) - however, the terms and conditions clearly state the method in which payments are applied:

(d) the following types of transactions which have​

appeared on a statement of account, in the following ​

order: where relevant, balance transfers (in order​

of commencement date); cash advances and cash​

equivalent transactions; and purchases;
​

(my bolding)

So cash advances are paid off first, meaning, as per the conditions in the rest of the brochure, purchases continue to be interest free (provided you have always paid your previous balances in full and are not subject to ongoing interest).

 

[JohnK]

if you are in negative debit balance for purchases, and take out a cash advance, ONLY the cash advance accrues interest. The purchases continue to be interest free until the due date (assuming you have always paid in full and are not already accruing interest on purchases).

If you do not owe 28 Degrees any money then you do not pay any interest on cash advances. My case in point is I have been withdrawing money I put into credit and I have not been paying interest on the cash withdrawals as 28 Degrees owes me money.

taking out a cash advance in no way negates any interest free period for purchases.

I believe it does if you are now carrying any sort of balance. I have been charged small amounts of interest when I have used more than my balance in credit.

 

[MEL_Traveller]

I believe it does if you are now carrying any sort of balance. I have been charged small amounts of interest when I have used more than my balance in credit.

Any cash advance which dips into your line of credit will attract interest immediately. So if you have +$500 and you withdraw $501 in cash. You will pay interest on the $1 until you pay that $1 back in full and your balance returns to $0.

But if you have -$500 in purchases, then withdraw another $500 in cash (so your overall balance is -$1000), you only pay interest on the $500 for the cash advance. If you pay in $500 the next day, the cash advance is negated and you stop paying any interest. The -$500 for purchases always is, and stays, interest free and is payable on the due date. (provided you have always paid your closing balance in full).

For me, pre-loading the card doesn't make much sense. Having $10000 in a high interest account at 5% nets me about $1.37 per day, or $41 per month. Taking out $1000 and paying it back the next day on 28 degrees costs me 57c in interest. If I make (on average) 4 cash withdrawals per month, I am paying around $2.30 in billed finance charges, compared to the $41 I make in interest elsewhere. Spending 10 months or so overseas per year I gain $410 in interest, but only fork out $23 in finance charges on my 28 degrees.

But i do have access to internet banking easily while I'm away, so makes the transfer process very easy.

Those billed finance charges are all I pay even though my card is regularly used for all purchases while I'm o/s and the balance for purchases is only paid in full at the end of each month at the due date.

The terms and conditions brochure (clause 19 and 20) don't seem to have changed recently. They deal with interest free purchases, and cash advances, and when interest is payable (or not). If they have I will need to get a second card to avoid the situation you describe.

 

[Baysider]

But if you have -$500 in purchases, then withdraw another $500 in cash (so your overall balance is -$1000), you only pay interest on the $500 for the cash advance.

Have had the card several years and never knew this. That makes it completely different to EVERY other credit card, as the normal rule is that once you make a cash advance when the card is already in debit, interest applies immediately to the FULL outstanding balance regardless of the transaction type. However, any payment comes off the cash advance first.

 

[MEL_Traveller]

Have had the card several years and never knew this. That makes it completely different to EVERY other credit card, as the normal rule is that once you make a cash advance when the card is already in debit, interest applies immediately to the FULL outstanding balance regardless of the transaction type. However, any payment comes off the cash advance first.

sorry but you are completely incorrect*.

Every credit card works the same way... you will pay interest immediately on any cash advance, but you do NOT lose your interest free on the remainder of the balance which is made form purchases (assuming of course you have not missed any previous payment due dates etc etc).

*If there are any credit cards out there that charge you interest on the entire balance as soon as you make a cash withdrawal I'd like to know, and I'd like to see the terms and conditions, and whether this is some sort of credit card for high risk people that can't get credit anywhere else. I would also suggest cancelling said card and getting anyone of the cards from a major reputable bank.

 

[Baysider]

sorry but you are completely incorrect*.

Every credit card works the same way... you will pay interest immediately on any cash advance, but you do NOT lose your interest free on the remainder of the balance which is made form purchases (assuming of course you have not missed any previous payment due dates etc etc).

Well now I'm confused. I haven't read through the T's and C's for some years, but what I said certainly used to be the case. The Moneybuddy website, How Credit Card Interest Is Calculated , backs up my understanding:

"Regardless of whether you have a basic card or an interest free card, cash advances will always start accruing interest from day one. A cash advance will also attract a higher rate of interest in many cases, and will generally also cause an interest free card to revert to full interest mode."

 

[MEL_Traveller]

Well now I'm confused. I haven't read through the T's and C's for some years, but what I said certainly used to be the case. The Moneybuddy website, How Credit Card Interest Is Calculated , backs up my understanding:

"Regardless of whether you have a basic card or an interest free card, cash advances will always start accruing interest from day one. A cash advance will also attract a higher rate of interest in many cases, and will generally also cause an interest free card to revert to full interest mode."

that is certainly unclear wording, but it is true. The 'interest free' card will not be 'interest free' for the cash advance.

During university I worked for one of the big four banks in their credit card call centre. This is going back 15 years or so. So I know my credit cards, and how interest is calculated. While banks and other finance providers have pulled all sorts of stunts over the years (including changing how payments were applied to the card so that cash advances came off last, not first (although I thought this has now been reversed by law?)), none of them ever had a card that lost its interest free period on purchases by taking out a cash advance, nor have any of the big four or other major lenders introduced such a change.

As i alluded to earlier, maybe one of the smaller niche lenders (for example specialising in cards for those with bad credit ratings) had something like that? Some of those less reputable lenders used to have interest rates around 39% IIRC. It wouldn't surprise me if they pulled something like you describe.