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  • FIRST POST
    • buzz1234
    • By buzz1234 6th Sep 17, 10:45 AM
    • 3Posts
    • 0Thanks
    buzz1234
    Credit Card Calculation Help
    • #1
    • 6th Sep 17, 10:45 AM
    Credit Card Calculation Help 6th Sep 17 at 10:45 AM
    Hi,
    I am a mature student starting this September, my old laptop has decided to give up the ghost. I am doing a photography degree and require a powerful laptop. The one I have chosen costs £1870.00
    I have a student loan and it is paid to me in instalments.

    I want to purchase the laptop with a credit card (17.4%) for purchases

    I have a surplus amount of money from the student loan to pay off the credit card and because of my tight budget I want to keep the minimum monthly payments as low as possible.

    I will have.

    11 Sept £612.86
    31 Jan £612. 87
    24 April £664.27

    What will the total amount of interest cost me?
    How Much will the monthly repayments be?
    Should I reserve some of the 11 Sept payment to cover monthly costs?

    I do hope someone can help with this.

    Thank you

    Simon
Page 1
    • eskbanker
    • By eskbanker 6th Sep 17, 12:21 PM
    • 5,466 Posts
    • 5,269 Thanks
    eskbanker
    • #2
    • 6th Sep 17, 12:21 PM
    • #2
    • 6th Sep 17, 12:21 PM
    Minimum repayments vary by card so nobody can tell you what the minimum is without knowing what the card is! The minimum payment calculation will be stated in the Ts & Cs of your card though.

    Likewise, until you've established the repayment pattern nobody can say how much the total interest will be.

    It may be worth checking if you can get a 0% card to avoid any interest - it's perhaps doubtful if your finances are very tight, but probably worth checking via the MSE eligibility calculator.

    If you need to use the 17.4% card (or any other that charges interest) then you should clearly pay off as much as you can as quickly as possible to minimise interest, so you'll need to throw most of your 11 Sept £612.86 at the first statement, leaving enough for the minimum repayments in the subsequent months until your next lump sum, and repeat until repaid. However, if the three sums you mention are your only funds that can be used then you won't have repaid the total cost after the last of them as they barely cover the capital cost without factoring in any interest....
    • buzz1234
    • By buzz1234 6th Sep 17, 1:18 PM
    • 3 Posts
    • 0 Thanks
    buzz1234
    • #3
    • 6th Sep 17, 1:18 PM
    Credit Card Calculation Help
    • #3
    • 6th Sep 17, 1:18 PM
    Many thanks for looking at this for me.

    I have taken a second look at the laptop and I can reduce the cost to £1708.80 by using the standard storage rather than an upgrade.

    This leaves me a surplus of £181.20

    Do you think this will be enough to cover the interest, bearing in mind the lump sums will be paid to the card on the dates given. I do have other income from part time work. I am looking for an estimated monthly payment amount to give me some sort of idea.

    Or even a best guess.

    Simon

    It is a post office card
    Last edited by buzz1234; 06-09-2017 at 1:20 PM. Reason: added information
    • eskbanker
    • By eskbanker 6th Sep 17, 2:31 PM
    • 5,466 Posts
    • 5,269 Thanks
    eskbanker
    • #4
    • 6th Sep 17, 2:31 PM
    • #4
    • 6th Sep 17, 2:31 PM
    From a quick bit of fag-packet calculation that looks like it should work out about right - current Post Office cards have a minimum monthly repayment of 2.5% of the outstanding balance so if you repay something like £520 off your first statement that would get the outstanding balance down towards £1,200 territory and £30ish monthly repayments should take you to the next lump sum in January, which you can then use more of (e.g. £570ish) to reduce the subsequent monthly repayments to more like £15-20. By the time you get to the last lump sum in April that should just about clear the remaining debt.

    If you have the option of deferring the purchase to Monday, and making use of most of the cash available to you that day in part-payment, to reduce the credit needed, that would help a bit....

    Does the laptop vendor offer any better finance terms than 17.4%?
    • buzz1234
    • By buzz1234 6th Sep 17, 2:45 PM
    • 3 Posts
    • 0 Thanks
    buzz1234
    • #5
    • 6th Sep 17, 2:45 PM
    • #5
    • 6th Sep 17, 2:45 PM
    Thank you so much that is very helpful
    The vendor charges 17.9%
    But I will defer till Monday and split the payment.

    Thank you very much
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