Credit Card Question

Marky

Marky

Marky

Soldato
Joined
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Hey all,

Trying to get my head around some things to do with Credit Cards...

If I buy an item for £1000 on a Credit Card that has 16.9% APR and then pay the minimum amount each month, would I in the end be paying:

£1000 + 16.9% = £1169

For my item?

What my main question is - Where does the interest apply... To the amount left on the balance each month? Or on the original balance?

I may be slightly confusing myself, but I want to know whether it will be just 16.9% added on the £1000 or will it be a constant stream of 16.9% interests added each month to the monthly balance.

Hope I've not confused any of you :p

Marky
 
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If you pay the minimum you'll pay a huge amount of interest....

The simple interest rate is applied to the balance, it's calculated on a daily basis from the day the purchase is eligible for interest (usually when it's charged to the card).

If you make a £1K purchase, how much do you want to pay a month to pay it off?
 
I'll edit this post once I work it out. It'll take me a couple of minutes.

Edit :

Simple interest rate 1.315%

Month 1
Purchase of GBP1000
Paid GBP200 when bill due. Assume exactly one month - likely innacurate.
Interest GBP13.15
Balance GBP813.15

Month 2
Paid GBP200 when bill due. One month after last payment. Now accurate.
Interest GBP10.59
Balance GBP623.74

Month 3
Paid GBP200
Interest GBP8.20
Balance GBP431.94

Month 4
Paid GBP200
Interest GBP5.68
Balance GBP237.62

Month 5
Paid GBP200
Interest GBP3.12
Balance GBP40.74

Month 6
Paid GBP41.27
Interest GBP0.53
Balance GBP0

Total interest paid GBP41.27

Poster below says "fool to buy anything on a CC" I don't agree.
 
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You'd be a fool to buy anything on a CC and not pay it off in full at the end of the month tbh. Would a 0% interest CC not be more suitable for your purchase?
 
rG-tom said:
16.9% APR = 1.315% per month
Click to expand...

Ahh I see - I thought the APR was an interest applied every month :p

Moses said:
My student loan came in today, so I was like, "yeahhhhh buddyyyyyyy ;DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD."


Then I remembered I'd put stuff on my credit card recently, so I was like, "je suis désolé :'("... then paid off said credit card.
Click to expand...

Ahh bad times :p

---

So in the example above, I would have to spend an extra £41.27 on top of my £1000 for the privilege of paying it off during 6 months...
 
Marky said:
Ahh I see - I thought the APR was an interest applied every month :p



Ahh bad times :p

---

So in the example above, I would have to spend an extra £41.27 on top of my £1000 for the privilege of paying it off during 6 months...
Click to expand...

It's not a 'privilege' to pay interest - anyone can do it and sadly those that can't really afford it are the ones who most need to do it.

Ask your bank for an overdraft, buy on Credit card for the payment security then pay off with the overdraft, it will be cheaper.

Andi.
 
andicole0 said:
It's not a 'privilege' to pay interest - anyone can do it and sadly those that can't really afford it are the ones who most need to do it.

Ask your bank for an overdraft, buy on Credit card for the payment security then pay off with the overdraft, it will be cheaper.

Andi.
Click to expand...

He meant the privege of paying it off over 6 months. In fact that's what he said.

Authorised overdraft interest is frequently higher than 16.9%. I know off the top of my head that Nationwide, HSBC and Natwest are over that.
 
Big Chris said:
Nope, that's their standard charge.
Click to expand...

unless you hold a reward/ultimate reward current account, in which case it's free for up to £300 then it's £1 per day up to £2500 over then up to £2 per day. But still £5 per day for unauthorised.

Supposedly its a fairer way of charging???:confused: works out that after a week over being overdrawn you are paying more than the old rate.
 
andicole0 said:
It's not a 'privilege' to pay interest - anyone can do it and sadly those that can't really afford it are the ones who most need to do it.

Ask your bank for an overdraft, buy on Credit card for the payment security then pay off with the overdraft, it will be cheaper.

Andi.
Click to expand...

The Halk said:
He meant the privege of paying it off over 6 months. In fact that's what he said.

Authorised overdraft interest is frequently higher than 16.9%. I know off the top of my head that Nationwide, HSBC and Natwest are over that.
Click to expand...

Exactly what The Halk said - I was talking about the Priviledge of not having to pay it all immediately.

Thanks again for explaining it all :)
 
Things obviously changed since my younger days. There still seems to be several accounts with Lloyds that would work out cheaper than leaving money on a credit card.

Andi.
 
i moved from halifax when they introduced the stupid £1 a day. Now have a First Direct account, that is free, and allows £250 of overdraft usage for free, and just a low % for anything over that
 
I stayed with Halifax because I never go overdrawn and they give me £5 a month :)
Might be looking at the Lloyds Vantage account if I can get to the bank before they close though.
 
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