Credit Card

TheEffect

I'm new to credit cards (Being 18) and have recently been accepted for a CapitalOne classic. I have a low limit (£200) and very high APR (About 35%).

I do plan on paying any small payment I make, off when the monthly bill comes in (by direct debit), however I'd just like to know, does it effect my credit rating if I pay say, half or a quarter off what I owe one month, then the full amount left the next month?

Also, if I was to put £100 onto the credit card, and only paid £10 for a few months, what's the time to pay it all off?

£100 = 35% is £35 / 12 = £2.91 interest per month?

Is that correct?

I don't plan on ever running a ballance over into the following months bill, however I just want to make sure I understand this correctly.

Thanks

TFD_2

Interest is charged daily, so will vary slightly month to month but budget £3 and you won't be far wrong.

As long as you make payments on time, it shouldn't make any difference to your credit rating.

YorkshireBoy

TheEffect wrote: »

I do plan on paying any small payment I make, off when the monthly bill comes in (by direct debit)

If this is a full payment DD (and it should be at 35% APR), then the rest of your question is irrelevant isn't it?

However, interest is accrued daily at...

Daily balance x monthly rate x 12 / 365

...and it will capitalise/compound on your statement date each month.

There should be a worked example in your T&C's (section 11?) entitled 'total charge for credit', which will give you an indication of borrowing £200 for a year and paying it off in 12 equal installments.

[Deleted User]

TheEffect wrote: »

does it effect my credit rating if I pay say, half or a quarter off what I owe one month, then the full amount left the next month?

So long as you make the "minimum payment" (usually the higher of £5 or 3% of the balance, but check your contract), it counts as a green mark, cos you've paid.

TheEffect wrote: »

Also, if I was to put £100 onto the credit card, and only paid £10 for a few months, what's the time to pay it all off?

35% APR is 2.5324% a month... so...

Month 1: You owe £100. You pay £10. Interest is charged at 2.5324% of the £100 (you pay interest on the whole amount if you don't pay the whole amount off). So you still owe £90, plus £2.53 interest. That's £92.53.

Month 2: You now owe £92.53. You pay £10. Interest is charged at 2.5324% of the £92.53, which is £2.34. You still owe £82.53 (the original balance minus what you're paying this month), and you're also charged this month's interest. So now you owe £84.87.

It'll take you a year to pay it off, and the interest will cost you £17 ish.

Here's the math each month:

Month number || Interest charged || Amount you owe
month1 £2.53 £92.53
month2 £2.34 £84.88
month3 £2.15 £77.03
month4 £1.95 £68.98
month5 £1.75 £60.72
month6 £1.54 £52.26
month7 £1.32 £43.58
month8 £1.10 £34.69
month9 £0.88 £25.57
mth10 £0.65 £16.21
mth11 £0.41 £6.62

and on Month 12 you'll pay that final £6.62 off.

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