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If you've ever been caught out without any cash on you, or you've needed to purchase some foreign currency or traveller's cheques in a hurry, you'll undoubtedly have found out how costly these transactions can be on a credit card.
However, with a little forward planning you can make sure you have the right card on you for when you need to access some emergency cash or purchase foreign currency or traveller's cheques.
The quick solution...
The credit cards listed to the right of this page have been hand selected for offering a great (and cheap!) solution for withdrawing cash and buying foreign currency or traveller's cheques.
What are cash transactions?
It is important to know that it is not just ATM transactions that are considered a 'cash withdrawal'. Getting cash back at the supermarket, purchasing foreign currency or even traveller's cheques will likely land you with handling fees and hefty interest charges.
So what is the good news?
Get yourself the right credit card (or the fail-safe method, a debit card!) and you can avoid those costly hidden fees and hiked up interest charges.
Use the below points when looking for a new credit card to make sure you are getting the best deal on cash transactions. You can also check your current credit card's terms and conditions to find out if they are offering you a good deal or are royally ripping you off (warning: don't be disappointment, most cards do!).
Top points to remember when choosing a credit card for cash transactions:
1. Cash withdrawal interest rate
- Great cards: Will offer an interest rate on cash transactions that is the same as the purchase rate.
- Good cards: Will offer an interest rate on cash transactions that is marginally higher than the standard purchase rate.
- Bad cards: Will charge very high interest rates on cash transactions, sometimes reaching almost 30% p.a.
2. Cash handling fees
- Great cards: Do not charge a handling fee on cash transactions. Sometimes the fee is waived if you also hold a current account with the same bank.
- Most cards: Will charge a handling fee on all cash transactions.
3. Allocation of payments
- Great cards: Will allocate payments made to your account towards higher rate balances (such as cash transactions) first, allowing you to repay these more expensive balances first.
- Most cards: Will allocate payments made to your account towards lower rate balances (such as introductory rates and purchase balances) first, leaving the more costly balances on your account until you have repaid all your lower rate transactions.
The quick solution...
If you want a credit card that will treat you and your cash transactions kindly, check out the cards listed on the right of the page: they've been hand selected for offering great propositions for cash withdrawals and buying foreign currency or traveller's cheques.
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