Making use abroad clear: Halifax Clarity credit card
HOW times have changed. When we last updated this review, the strong pound meant that British travellers were getting better value when they spent abroad, however they chose to do it.
However, with sterling taking a hammering, and the currency roller coaster expected to continue for a little while, it's now more important than ever to make our money go as far as possible when abroad - and that means doing our best to avoid unnecessary fees.
Despite continued action from consumer groups, these fees - imposed on buying foreign currency, making purchases, or taking cash out at the ATM (whenever we try to get money in a foreign currency, basically) - can easily eat even further into our diminished spending power.
Clarity on use abroad?
Special "use abroad" credit cards promise to circumvent those fees; the Halifax Clarity credit card has led that market for some time.
The Clarity card was launched in October 2010 as a no nonsense product offering one simple interest rate, no "confusing" introductory offers, and as few fees as possible.
Most relevantly here, the card doesn't charge fees or commission on foreign currency transactions.
Most credit cards charge commission on foreign purchases in the form of a fee of up to 3% on each transaction carried out using a foreign currency.
A £50 purchase would cost an additional £1.50; three purchases of £100, £75 and £30 would incur a total fee of £6.15.
With a 0% fee, any transactions made abroad will cost no more than the price on the label as long as the balance is repaid in full.
Currency is converted at the MasterCard rate, which can be checked here.
Also absent is the fee most card providers charge cardholders at the ATM.
Usually credit card users pay a fee to withdraw cash, in whatever currency, ranging from flat fees of at least £2 up to 3% of the amount withdrawn - and are then charged interest on top of that, often at a different rate from that charged on purchases, from the moment the cash comes out of the machine.
However, Halifax don't charge this fee at all, and the interest rate for these types of transactions - technically known as a cash advance transactions - is the same as it is for purchases - which makes it unusually low.
It was once possible to "preload" some credit cards by paying more than the outstanding balance on the card, then using that positive balance for fee-free cash transactions. But this loophole was closed in 2010, shortly after the Clarity's launch.
As a result, the Clarity card is one of the cheapest options for credit card purchases and cash withdrawals abroad, although there may be one or two specialist debit cards that are even cheaper.
That said, "fewer fees" is not the same as "no fees". Late or declined payments, making no monthly repayment and exceeding the credit limit are all subject to a standard £12 fee per incidence.
Low interest rates
At the time of writing, the Halifax Clarity has the same interest rate for purchases, balance transfers and cash advances of 18.9% APR representative (variable).
It's worth noting that only 51% of credit card applicants will be offered that representative APR; Halifax will offer other applicants 21.9% APR (variable) or 25.9% APR (variable) depending on their circumstances and credit history.
Even their lowest APR isn't quite as good as it perhaps could be; at the time of this update there are three cards offering lower rates.
|0% use abroad card||Representative APR (variable)|
|Saga Platinum Visa||11.9% APR (cost of credit)|
|Nationwide Select Visa||15.9% APR (cost of credit)|
|Post Office Platinum Mastercard||17.8% APR (cost of credit)|
Note, though, that none of these cards offers a fee free cash advance facility. That's partly why in various personal finance awards, from year to year, the Clarity keeps coming out on top.
Once upon a time some Halifax Clarity credit cardholders could also get cash back of up to £5 a month on purchases - and unusually that perk wasn't limited to spending in the UK.
Cardholders with a Halifax reward current account, reviewed here, were entitled to a "bonus" £5 a month if they used their credit card for at least £300 of purchases in a monthly billing period, the equivalent of about 1.6% cashback.
But cash back on credit cards is a disappearing perk - and Halifax have not been immune to this trend. All mention of that benefit had vanished by summer 2015.