How Much To Avoid Interest

mikeopvc

I got my first ever credit card recently so just after some advice please,

It's a virgin card and on december 4th I did a transfer of £3000 into my current account and have been charged £89.40 (2.98% fee).

I understand that the minimum payment is £25 but should I pay the £89.40 aswell as £25 and when should I do this?

I notice online that I can make a payment by debit card so will probably do this but I don't want to pay too early, also is now a good time to set up a direct debit from current account? If so how do I know what date to set for it as I don't yet have a statement?

thanks in advance

Mike

SecretSquirrel88

If it a virgin card, isnt it 0% on balance transfers?

SheffGruff

The balance transfer fee is normally included as part of the 0% introductory offer, so you won't pay any interest on it until the offer expires. FWIW, if you incur any other fees (eg late payment), these probably will accrue interest. However, you can't "pay off" the fine, because any payments you make are used to pay off your cheapest debt first (so your 0% balance will be paid off first, but the £12 fine stays on your account and can't be paid off until the whole 0% offer has gone). This is one of the ways they can make money out of ill-disciplined stoozers.

The best way to make money is only to pay the £25 minimum - you pay the £89.40 (and the rest of the balance) when the 0% offer ends.

Ring Virgin and ask them about setting up a DD and they'll do it for you and ensure that it gets paid before its over-due. Be aware though you may lose out on some interest-free period here because they're likely to take the cash as soon as the statement is generated, rather than on the payment due date.

NickX

SheffGruff wrote: »

FWIW, if you incur any other fees (eg late payment), these probably will accrue interest.

Actually if you incur penalty fees for late payment or credit limit breaches, they will probably revoke your 0% deal completely and you'll accrue interest on the lot. So, basically make sure you pay the correct amount ontime and you'll benefit from the 0% promotion.

NickX

SheffGruff wrote: »

TRing Virgin and ask them about setting up a DD and they'll do it for you and ensure that it gets paid before its over-due. Be aware though you may lose out on some interest-free period here because they're likely to take the cash as soon as the statement is generated, rather than on the payment due date.

No, this is not correct, the DD usually takes the funds on or around the payment due date. This actually maximizes the interest free period rather than minimizing it.

mikeopvc

SecretSquirrel88 wrote: »

If it a virgin card, isnt it 0% on balance transfers?

yes but there is a 2.98% fee for the amount transfered which of £3000 is £89.40

mikeopvc

I think I'll just pay £25 via debit card today and set up a direct debit to start one month from today just to be on the safe side, I don't want to risk anything just for the sake of a few days.

NickX

mikeopvc wrote: »

yes but there is a 2.98% fee for the amount transfered which of £3000 is £89.40

The fee will get added to the total balance.

As long as you make the Minimum Payments ontime and pay the lot off before your 0% promotion expires you will pay no interest.

Good Luck.

YorkshireBoy

mikeopvc wrote: »

I think I'll just pay £25 via debit card today

I'd hold fire if you haven't yet had your first statement. The chances are you'll pay too early and then have to pay again when you get your first statement. Your payment MUST arrive between the day after statement date and it's respective payment due date.

If you look online (assume you're registered already?), it'll tell you in your secure area how long the debit card payment takes to clear.

and set up a direct debit to start one month from today

You won't be able to dictate the specific day your DD is collected. Virgin will determine this based on your statement date (DD collection date will be around 19 days after this).

After setting up the DD, check your statements very closely. If the message "your minimum payment direct debit will be collected from your nominated account on or after xx/xx/xx" does not appear YOU MUST pay by other means.

mikeopvc

I just rang up virgin and set up a dd with the nice lady, she said my statement will be printed on the 19 december and my first payment due by 11 jan, minimum payment will be taken from my current account in time to avoid interest so I shouldn't need to make any debit card payment.

Why am I so paranoid about this?:rolleyes: I think it's from reading in these forums about all those who have been caught out by cc companies and their interest charges.

I think I will still make a £25 debit card payment when the statement arrives just to give me peace of mind:o

thanks all for your advice

Mike

Mr._H_2

mikeopvc wrote: »

I just rang up virgin and set up a dd with the nice lady, she said my statement will be printed on the 19 december and my first payment due by 11 jan, minimum payment will be taken from my current account in time to avoid interest so I shouldn't need to make any debit card payment.

Why am I so paranoid about this?:rolleyes: I think it's from reading in these forums about all those who have been caught out by cc companies and their interest charges.

I think I will still make a £25 debit card payment when the statement arrives just to give me peace of mind:o

thanks all for your advice

Mike

There's a problem with this though - if you make your minimum payment by debit card, then there's no need for the DD to happen that month, so it won't. Then how do you know it's working?

Just let the DD do its thing. My girlfriend and I both have Virgin CCs whose minimum payment we pay by DD and it works fine.

IIRC, your first "minimum payment" will equal £25 + the 2.98% balance transfer fee.