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Minimum credit limit -what does this mean?

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I'm new to credit cards, avoided them all these years, but want to get one now just to use as security for companies going bust.

All the cards seem to have a 'Minimum Credit Limit'
i.e. Minimum credit limit £250, maximum subject to status.

What does the min amount mean? Is it that I can only use the card if I buy an item over £250?

Thanks
Jason

Comments

  • normanmark
    normanmark Posts: 4,156 Forumite
    No, it means that the lowest limit you can have on a credit card is £250 (as in if you have a credit limit of £250, the minimum, then you can only spend up to £250 on that card).
  • Thanks for clearing that up.
  • is that montly or overall?
  • rsykes2000
    rsykes2000 Posts: 2,494 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    is that montly or overall?

    It is overall.
  • big_Daddy_Dave
    big_Daddy_Dave Posts: 284 Forumite
    edited 25 August 2010 at 8:33PM
    .....................................
  • sammie383
    sammie383 Posts: 165 Forumite
    If you had a limit of 250 and you spent the £250 when you got the card you would have reached your credit limit. ( £250 balance on card - £0 available balance )

    Say then when you get your statement, you are asked to pay the minimum payment of £15 (example only ) and you paid that, once that £15 had cleared on your account you would then have £235 balance on card and £15 availabe balance.

    This is all assuming you are paying no interest on the card, as had you decided to only pay the minimum and not pay the full £250 you would also have interest charges added onto your card balance.

    To put it the other way - if you decided to pay the full balance and not the minimum payment, then as soon as the £250 payment had cleared on your account, you would then go back to having a £250 availabe balance, and £0 card balance.

    I do hope I have explained this well enough.
  • big_Daddy_Dave
    big_Daddy_Dave Posts: 284 Forumite
    edited 25 August 2010 at 8:34PM
    ....................................
  • dhassen
    dhassen Posts: 759 Forumite
    I think you made it up Dave! If like you're saying, they let you spend £250 a month, while only paying minimum payments, you would rack up a pretty massive debt over the course of a year. I think Sammie explained things pretty well.
    Official DFW Nerd Club - Member no. 784 - Proud to be dealing with my debts
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