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Minimum credit limit -what does this mean?
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Bluefusion
Posts: 106 Forumite


in Credit cards
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
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
0
Comments
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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).0
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Thanks for clearing that up.0
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is that montly or overall?0
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big_Daddy_Dave wrote: »is that montly or overall?
It is overall.0 -
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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.0 -
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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 debts0
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