Building a Good Credit Rating

Christopherj_2

Someone told me to purchase everything on my credit card and repay the balance in full every month and only use my debit card for cash withdrawals. Would this help my credit rating? I'm not sure on how this works.

YorkshireBoy

Read the 'credit rating' article...

http://www.moneysavingexpert.com/banking/credit-rating-credit-score

Christopherj_2

Thanks but I have already read that. I do a question though.

How do I make the most of my credit card with 0% interest? Do I pay the monthly minimum until the 0% interest deal expires, or would that affect my credit rating?

NickX

Christopherj wrote: »

How do I make the most of my credit card with 0% interest? Do I pay the monthly minimum until the 0% interest deal expires, or would that affect my credit rating?

As long as you pay at least the minimum and before the due date every month then this will not affect your Credit Rating.

Do remember to either pay the entire balance off or transfer elsewhere before the 0% deal expires otherwise you will end up accruing interest at the extortionate variable rate.

Christopherj_2

Sorry for a dumb question, but what does this mean?

Enjoy an interest free period on purchases made with your Classic Credit Card - up to 56 days - if you pay your current and previous month's balance in full and on time. Please see Summary Box for details.

Correct me if i'm wrong, but you wouldn't incur interest if you paid your credit card bill on time every month.

NickX

Christopherj wrote: »

Correct me if i'm wrong, but you wouldn't incur interest if you paid your credit card bill on time every month.

You need to pay your Credit Card bill on time and in full every month to avoid interest.

The 56 days is available by timing purchases very carefully. For example, if you make a purchase the day after your Statement Date, it will be then nearly a month before it appears on your next statement. You then have 3-4 weeks to make that payment. As long as you pay in full and on time, then you pay no interest, therefore you didn't have to actually pay for that original purchase for up to 56 days.

This is standard for most Credit Cards, however if you are on a 0% promotional rate, you will pay no interest anyway as long as you make at least the minimum payment ontime.

NickX

I think the thread below is asking the same question that you have raised over interest free periods - may help make sense of it.

http://forums.moneysavingexpert.com/showthread.html?t=1037929

Christopherj_2

I used my credit card on the 16th of this month and my bill due date is on the 23rd. Is there anyway I could pay the minimum on the 23rd, then pay the remainder of the bill early next month without incuring interest?

NickX

Christopherj wrote: »

I used my credit card on the 16th of this month and my bill due date is on the 23rd. Is there anyway I could pay the minimum on the 23rd, then pay the remainder of the bill early next month without incuring interest?

We need a bit more info here - what was your Statement Date ? And what balance showed on your Statement ? Are you on a promotional Rate at present ?

YorkshireBoy

In another thread you said your statement date was the 26th of the month. As such, a purchase made on the 16th of this month has missed June's statement date, so won't need paying until 23rd August (as part of your 26th July statement balance).

Christopherj_2

My statement date is on the 26th and my bill date is on the 23rd. I am totally confused about how credit cards work, even with the 56 days!