Credit cards... how do they work? (serious thread)

Rotty said:
if the interest puts you over the £1k you will have to pay the full amount it goes over by and the minimum on the £1k
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flip sake. okay, looking at previous statements, the interest has been around £16.00 so I'll just expect it to be more as I've used more money so I'll not spend the full available balance, I'll just deduct the expected interest from the money that is available... prob doesn't make sense.

This is how my credit card looks atm:

pic removed as it looked like a real number]
 
yes, leave £20 and you wil be fine or budget £20 more for your payment next month


I'm sure you don't need telling but this would be a terrible way to run your finances for any period of time

if you can't clear it then balance transfer it to a 0% card
 
Rotty said:
yes, leave £20 and you wil be fine or budget £20 more for your payment next month


I'm sure you don't need telling but this would be a terrible way to run your finances for any period of time

if you can't clear it then balance transfer it to a 0% card
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100% Rotty but I'm in a bad position atm. I plan on clearing this card and cutting it up when I get a job :)

I've tried applying for cards to balance transfer but have been refused as my credit rating appears to be bad atm :(
 
buckeejit said:
100% Rotty but I'm in a bad position atm. I plan on clearing this card and cutting it up when I get a job :)

I've tried applying for cards to balance transfer but have been refused as my credit rating appears to be bad atm :(
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no worries, we all have bad times, as long as you are aware :)
 
Have you spoken to your card company about reducing the APR? Say you think it is uncompetitive and are looking to do a balance transfer elsewhere for a better deal.
 
always keep at least 10% of total limit away from that limit, If you spend that £51 its going to put you over your limit then the rape happens with the charges
 
Hi guys. I'm thinking in getting a credit card (it may be useful for hiring cars, travelling, etc.) but I don't really understand how they work...

I can't recall any time I bought something I couldn't afford. This doesn't mean I'm rich, I just don't buy something until I have saved the money it costs.

I'm assuming that credit cards work the following way: Let's say you have a £1000 credit line on your card and by the end of the month you have spent £700 with the credit card. In your credit card account a -£700 balance will show and you have a grace time to pay it with no interest. If you don't pay the full £700 you owe (I guess you pay with a bank transfer), you will pay an interest (the APR %)

Is that how it works? If it is, is there any fine print I should be worried about for the people who, like me, don't intend to have negative balance? I guess we are not a good business for banks...
 
AFAIK (well at least with mine) you get a limit and can spend anything up to that limit but have to pay it off by the end of the month otherwise you will have to start paying interest. I find my credit card invaluable but ALWAYS pay it off fully at the end of the month (with an APR of 34%, it's a great incentive). Like anything, just be careful - they are very handy and help to improve your credit profile.

Moneysavingexpert have a great section on credit cards and which companies offer the best benefits etc.
 
buckeejit said:
Yes, was 16.9% when I got it a few years back.
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How are you doing these days? That was a hell of a situation you were in. i hope you're doing better

Myself instead of being seduced by interest free periods etc i just went for the lowest overall as i pay my card off every month anyway.

Ended up with a Barclaycard with 6.9% APR
 
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And you can set up to take the full balance each month by direct debit, so as long as you have enough money in your bank at the time to cover the direct debit, you can spend up to your credit limit on the card and just forget about it. Works sort of like a debit card but with more protection when done like this :) And more perks.
 
The interest is never added to the balance on the card.

You pay ALL the interest for that month in the minimum payment+ the minimum 5% of outstanding balance which makes up your bill at the end of the month.

How do people not know this?
 
khodos said:
Is that how it works? If it is, is there any fine print I should be worried about for the people who, like me, don't intend to have negative balance? I guess we are not a good business for banks...
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The shops in which you use your card pay a commission for every transaction, which means all clients are good business for banks.
 
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