Building a Good Credit Rating

YorkshireBoy

Christopherj wrote: »

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!

Whatever you spend between 26th of May and 25th June needs paying by the 23rd July.

Whatever you spend between 26th of June and 25th July needs paying by the 23rd August.

etc, etc



Whatever you buy on 26th May, you'll pay for it (roughly) 56 days later when you pay your bill on 23rd July.

Whatever you buy on 25th June, you'll pay for it (roughly) 28 days later when you pay your bill on 23rd July.


Get a piece of paper and draw it out in a timeline.

Christopherj_2

Thanks TorkshireBoy!

I used my credit card on 16/07/08, so if I pay the balance by 23rd of August, I shouldn't incur interest charges. Please correct me if i'm wrong.

When I look at previous statements, it just tells me the interest charge for that month, it doesn't tell me which date(s) the charges are for. Is this right?

YorkshireBoy

Christopherj wrote: »

I used my credit card on 16/07/08, so if I pay the balance by 23rd of August, I shouldn't incur interest charges.

That's correct, but only if there was no interest charged on your last statement and you pay your entire balance by 23rd August.

The above assumes there is no 0% offer on the account.

Christopherj_2

I have had my HSBC Mastercard for a little while and the 0% interest doesn't apply to me anymore.

Last week, I paid off my credit card bill in full as I had only been paying the minimum each much and incured some debt.

It is likly I will incur interest, but i'm not sure if I have now payed off this interest, whether it was applied to my last statement, or if it will be applied to my next statement.

YorkshireBoy

You need to pay off two consecutive statements in full by their respective due dates to stop 'residual interest' accruing.

The alternative is to make an overpayment to create a positive balance...which you can then spend again the following month.

Christopherj_2

Having paid off the balance in full a few days ago, is this classed as one consecutive month?

YorkshireBoy

Can there be "one consecutive month"?

When you've paid your next statement in full the interest will stop...providing you haven't made any cash withdrawals or balance transfers, ie only retail purchases.

Christopherj_2

Even though I have paid off my balance in full, this would have been the 26/05/08 to 25/06/08 statement, would I receive interest on my next statement?

YorkshireBoy

You're asking the same question several different ways. The answer is the same as I gave you before...

So long as your balance consists entirely of retail purchases, the interest will stop once you've paid two consecutive statements in full, and by their respective payment due dates.

You've paid the first of these recently (that was due next week on 23rd July), so only now have to pay the 26th July statement by 23rd August and your interest will stop.

Christopherj_2

I just have one more silly question :S.

As I used my credit card to make a purchase on 16/07/08, providing I pay the balance in full in 56 days time which would be on 16/09/08 (am I right here? My bill date is on 23/07/08 which I should have 56 days to pay the balance in full) I wouldn't incur interest charges.

If i'm totally wrong about this, please tell me. I'm hoping i'm getting this all right!