59 days interest free

giruzz

Hi,

I am new to credit card and I am really not sure how is best to proceed.

I just got an Halifax card 27.9% interest with a 59 days interest free and payment on the 8th of each month.

The bank says I got 59 days interest free after the purchase date (e.g. for a purchase 1st of Jan the interest will start 59days after).

Am I correct? What I am trying to archive is to get a better credit score and the last thing I want to do is to pay a 28% interest..

Which way should I go? Payment in full at the end of each month or pay a small part and leave the rest close to the 59th day?

thank you

giruzz

consumer

giruzz wrote: »

Hi,

I am new to credit card and I am really not sure how is best to proceed.

I just got an Halifax card 27.9% interest with a 59 days interest free and payment on the 8th of each month.

The bank says I got 59 days interest free after the purchase date (e.g. for a purchase 1st of Jan the interest will start 59days after).

Am I correct? What I am trying to archive is to get a better credit score and the last thing I want to do is to pay a 28% interest..

Which way should I go? Payment in full at the end of each month or pay a small part and leave the rest close to the 59th day?

thank you

giruzz

Hi, 28% interest seems massive, so I would pay the credit card bill in full at the end of each month. (Unless it is free purchase for few months deal, where you can just pay minimum balance but it builds up a big bill at the end of the deal).

Only those transactions nearing 59 days credit free limit will be included in your monthly bill.

When you receive your credit card statement each month, it will say the amount you need to pay that month and the due date for that. You do not need to calculate 59 days, bank will automatically do it for you. I hope that's clear.

giruzz

consumer wrote: »

Hi, 28% interest seems massive, so I would pay the credit card bill in full at the end of each month. (Unless it is free purchase for few months deal, where you can just pay minimum balance but it builds up a big bill at the end of the deal).

Only those transactions nearing 59 days credit free limit will be included in your monthly bill.

When you receive your credit card statement each month, it will say the amount you need to pay that month and the due date for that. You do not need to calculate 59 days, bank will automatically do it for you. I hope that's clear.

First of all, the interest is 28% because I don't have a big credit score, I have been in the UK only for 11months...

Also, I am not sure I understand how the system works....

My current credit card online statement says:

Current balance: £13.30 (that was my first purchase)
Available balance: £235 (that would be 500-what I spent so far).

The minimum repayment is £5 or 2%.

So, if I understand next month (my first bill) will be only the biggest between (total expenditure)*2 and £5 ? No interest will be charged on the remaining?

Thank you

giruzz

NickX

giruzz wrote: »

The bank says I got 59 days interest free after the purchase date (e.g. for a purchase 1st of Jan the interest will start 59days after).

No its not quite like that I'm afraid.

The interest free period is up to 59 days. Whether you actually get 59 days depends when you make your purchases.

Basically if you make your purchases just after your statement is produced, that purchase won't show up on a statement for a month. Then you have 3-4 weeks to pay the statement off in full. This means you are benefiting from up to 59 days interest free.

If you make your purchases just before your statement is produced, that purchase will effectively show up on a statement immediately. Again you have 3-4 weeks to pay the statement off in full, meaning you are only benefiting from 25ish days of interest free.

Due to the extortionate interest rate your best bet is to always pay the entire statement balance off in full and make sure they receive this before the Due Date as set out on your statement.

CLAPTON

To avoid paying interest you MUST pay the full amount on your statement by the date given. Make sure you leave plenty of time for the payment to go through.
Better set up a direct debt for the FULL amount so you never forget.

You are allowed to pay only the minimum but then you will pay lots of interest.

The minimum is indeed worked out by taking the total x 2% or £5 whichever is the greater BUT if you pay only the minimum you will pay lots of interest.


the 59 days interest free refers to a theoretical maximum of 59 days which in general you will never experience.

consumer

giruzz wrote: »

First of all, the interest is 28% because I don't have a big credit score, I have been in the UK only for 11months...

Also, I am not sure I understand how the system works....

My current credit card online statement says:

Current balance: £13.30 (that was my first purchase)
Available balance: £235 (that would be 500-what I spent so far).

The minimum repayment is £5 or 2%.

So, if I understand next month (my first bill) will be only the biggest between (total expenditure)*2 and £5 ? No interest will be charged on the remaining?

Thank you

giruzz

Amount mentioned in the statement is the one you need to pay back by due date. Any transactions done after the statement date, will be included in the next statement.

If your statement date is 1st Jan, any purchase you make on 2nd Jan will appear on your statement of Feb and there will be 2-3 weeks time to pay it back.

normanmark

The 59 days is a bit of a word play by credit card companies.

In short it basically means pay off your statement in full & on time then you won't be charged interest.

Milarky

To the OP: Is your card on a special low rate for purchases anyway (as you mention that it is a new card)? If not, then the above advise is correct:

You only have to pay the minimum of 2% or £5 but will get charged interest (next statement) from the date of purchase unless you pay the balance in full by the due date on the statement.

A direct debit for the full balance will sort this out most effectively - because the payment is always taken on the due date - not earlier. BUT using the DD scheme to pay your credit card bill makes you responsible for the conduct of your current account (i.e. it passes the problem along the line but doesn't make it go away) A bounced direct debit will likely result in both a 'late payment' fee (£12) for the card plus a 'returned payment' fee (£10-£30) for the bank account - something you don't want to get into. In that context paying just the minimum by DD and suffering a bit of interest every month is much less risky - even though we MSE'rs would spit rather than see ourselves in that position...

tictax

make sure they've not signed you up for payment protection insurance.

i have a feeling they may have seen giruzz coming.....

adrianelliott

My understanding of the interest free period is that it's basically the number of days they give you to pay the statement + 31 days because statements cycle monthly.

However Barclays terms really confuse me:

Maximum 56 days on purchases if you pay in full and on time each month, during the first six months.

Is it saying that for the first six months I am guaranteed to get 25 days to pay a statement and that after that I won't? The only other way I can read it is that if I don't pay my first 6 statements in full, they will punish me by making me pay my statements earler.

I probably should have made sure I understood this part before I submitted my application

giruzz

tictax wrote: »

make sure they've not signed you up for payment protection insurance.

i have a feeling they may have seen giruzz coming.....

When I did the application the lady pushed for about 20min to get the policy but I declined.

I've applied for a 10month interest free but due to my poor credit rating (I've been in the UK for less than 12months) I was able only to get the 27.9% interest with a max £500 balance.

Online the system says current balance £13.30 / due date 8th of Sept... but I really don't know when I'll have to pay..so far I don't have a monthly statement yet (online or sent by post)

I do have an Halifax current account and if the due date is tomorrow I'll transfer the requested amount before the end of the day... I'll have to check online during the morning if there is a direct debit (for the minimum repayment of £5)

Also, I asked about paying in full / increase the minimum payment but the operator at Halifax said that was not possible.

She said to call back after my first statement, they cannot change during the registration or activation process.

I'll keep you posted and thank you for the help!

giruzz