Credit card

miseter

Hello this is misters big bro here. I have a question for you.

Ok I have a credit card with 27.9% apr on it to build my credit rating. I have spent my 300 limit. If I cannot pay the whole balance in the month and just pay minimum payment or 100 of it how much would they charge me the next month? Please reply guys thanks.

jonesMUFCforever

Rough estimate £200 o/s for one year would cost you approx £56!!
Divide that by number of months will be outstanding.

YorkshireBoy

Play around with the calculator at http://www.whatsthecost.com/creditCard.aspx to see the effect of paying the minimum amount, or some other interim figure.

Prepare youself for a shock - especially at 27.9% APR!!!

For example, if your 27.9% APR card has a 2% (min £5) minimum monthly payment, then on a £200 balance your first £5 payment will be used to pay £4.62 interest and only 38p off the debt - and it'll take you 8 years to totally clear the balance.

inmypocketnottheirs

Best to pay the hundred quid off and get the balance down asap. OK to use up to the limit and clear each month, i.e. groceries, fuel etc, but don't draw cash.

HTH

miseter

Cheers guys. I dont think i will be paying low payments lol. One more question. Say I ran up my 300 limit and paid the min payment the first month, would I be able to clear the debt the next month if I had the cash to do so?

inmypocketnottheirs

miseter wrote:

Cheers guys. I dont think i will be paying low payments lol. One more question. Say I ran up my 300 limit and paid the min payment the first month, would I be able to clear the debt the next month if I had the cash to do so?

Thats exactly what the credit card company wants you do. Then next month you will do the same, and again, and again. Then they will increase your cerdit limit to £600, so in a couple of months you will be up to that, minimum payments for another couple of months, increased credit limit, more minimum payments, more increases, ad infinitum. Then 'Hey Presto' five grands worth of debt!

Please be very careful! A word from the wise! Wisdom is learning from the mistakes of other!!!! :beer:

:xmassign: