Halifax Online Bank UK, a division of the Bank of Scotland PLC, last week launched the Halifax Clarity Card, which does not impose a foreign-exchange fee on any purchase transactions or cash withdrawals, the United Kingdom-based online banking company reported July 7.
Issued by the Bank of Scotland, the MasterCard-branded Clarity Card also does not impose balance-transfer or annual fees. It also applies an annual percentage rate of 12.9% on purchases, balance transfers and cash advances.
The card also offers qualifying customers with a Halifax account a 5 British pound cash-back reward when they spend 300 pounds (US$452 or 359 euros) or more within each statement period.
Qualifying customers include those who, when opening a Clarity card account, already pay 1,000 pounds or more each month on their existing Halifax credit cards. Consumers also may qualify if they open or have a Halifax Ultimate Reward account or move their current account to Halifax using the Halifax Switching Service and pay 1,000 pounds or more each month.
Issuers traditionally charge customers foreign-exchange fees when they make purchases or withdraw cash in another country, and the rates can range from 1% and 3% of the amount purchased or withdrawn. As such, many consumers prefer to use cash when traveling to avoid the fees.
In fact, more than 30 million British consumers still use cash when traveling internationally, Halifax survey data show. Despite this large number, Halifax hopes consumers will find the Clarity card “more appealing” because of its lack of foreign-exchange fees, which might entice consumers to carry less cash with them while traveling.
ICM Research Ltd. conducted the survey of 2,011 adult British consumers for Halifax in early June. Halifax was unable to comment on whether the survey was via telephone or Internet.
Though consumers tend to use cash while traveling abroad, Halifax believes credit and debit card spending is increasing, the company noted in a news release.
Consumers have increased their credit spending by 5% over the past 10 years, with one-third of them using a credit card while traveling internationally, according to Halifax’s survey results. Halifax also found that within the last year 10 million consumers will use their cards for shopping, 9 million for dining out, nearly 8 million for unexpected expenses, 7 million for accommodation costs and 3 million to secure cash while traveling abroad.
The survey results also suggest that approximately 24 million consumers now use debit cards while traveling abroad compared with 10 million who did in 2000, according to Halifax.
The results also indicate consumers use credit cards when traveling abroad for protection. Just less than half of the respondents preferred not to carry large amounts of cash, while one-fourth said they use the cards specifically because they provide protection against fraud and cardholders can replace lost or stolen cards.
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