new user.........

lukemed1

Hi everyone, just got my first credit card, i've looked @ the ts&cs but it isn't telling me what I want to know.

How does it work?

do they send your statement to you and expect repayment to be made a month after the date you first spend on it?

cheers

Luke

AverageJoe_4

your statement is sent to you with a maximum time period to pay - something like 56 days...

pay in full and the estitmated interest will not be added to your account, pay the minimum and it will be.

i dont know an awful lot about CC so you'll get better advice on here from others.

Best advice i can give you, cut it up and dont use it. No one ever got rich from being a CC user.

moonrakerz

AverageJoe wrote: »

your statement is sent to you with a maximum time period to pay - something like 56 days...

Be careful here ! you don't get 56 days to pay when your statement is sent - if you do, please tell me which card you have !

The most you will get is 56 days from the purchase until the payment due date. You will get a statement every month. That will tell you when payment is due, the max you will get is 28days from the raising of the statement. Depending on the card issuer (and the post !) you can have as little as 10 days to pay it.

lukemed1

so if i purchased something on the 25th, would i then be expected to repay it by the 25th of the following month?

cheers

nzseries1

Also, another thing to point out is... if you don't pay the entire amount, you will get charged interest on everything.

For example, if you spend £100 on something, and then make a payment of £95, some people think you will only pay interest on the £5 still to pay. This is wrong - you will pay interest on the entire £100 from the date the transaction was made until the date that the CC company receive the payment.

CLAPTON

if used sensibily a CC is quite useful.

you will receive a statement each month (either paper or e-statement depending upon the card)
it will tell you how much you have spent... do check each item.
it will tell you the minimum payments allowed
it will tell you when you must pay by.

unless you pay the full amount you will be charged interest
make sure you leave enough time for your payment to be cleared

set up a direct debt for the full amount so you never forget to pay and never pay interest. Make sure when you set up the DD you still pay normally until the actual statement says you have set up a DD.

do not withdraw cash as you pay a fee plus interest at a high rate.

nzseries1

lukemed1 wrote: »

so if i perchased something on the 25th, would i then be expected to repay it by the 25th of the following month?

You'll have to pay between 10-25 days after your statement date (which is printed on your statement and is about when you receive the statement in the post).

If you buy something on March 25, and your statement date is March 28, you will have until about April 15 to pay it.
If you buy something on March 28, and your statement date is March 28, you'll also have until April 15 to pay it.
If you buy something on March 29 (one day after your March 28 statement date), then it will show on your April 28 statement and you'll have until May 15 to pay it.

CLAPTON

lukemed1 wrote: »

so if i purchased something on the 25th, would i then be expected to repay it by the 25th of the following month?

cheers

No, you wait until you get your monthly bill and then pay the bill before the due date ... which can be anything from 10 days to 30 days after the bill date.

NickX

nzseries1 wrote: »

If you buy something on March 28, and your statement date is March 28, you'll also have until April 15 to pay it.

Well actually it usually takes a couple of days for a transaction to hit the account, so I find that if you make a purchase on the statement date or even the day before you don't actually see that on a statement for a month. This is an excellent way of maximizing the standard interest free period offered by most Credit Cards.

lukemed1

so basically it's better to wait till i get my statement then make my purchases to give me more time??

cheers

---lee---

lukemed1 wrote: »

so basically it's better to wait till i get my statement then make my purchases to give me more time??

cheers

Correct - ish. The optimum time is just before you get your statement - so that it's too late to be included on the current statement. This is a fine line as if you get it wrong, it backfires and the purchase is included in your statement a couple of days later.

As Clapton suggested, setup a direct debit so that you can't get caught out with any late payment charges. If this is for the full amount, you won't pay interest on normal purchases. Don’t rely on your direct debit to make payment until you get a statement which confirms that the DD is in place. They can take a while to setup. You can usually arrange them over the phone.

Avoid cash withdrawals on pain of death :mad: as these normally attract fees (some cards like Abbey Zero don’t charge a fee for this) and very high interest from withdrawn date – even if you pay in full each month.

Use a different PIN for your credit cards to your debit cards so that if you accidentally put one in a cashpoint you have a better change of realising your mistake.

Be careful with foreign transactions as most providers will hide a surcharge for currency conversion within the transaction. There are some cards which don’t charge these fees – Nationwide (shortly introducing charges) and Abbey Zero, Post Office (Platinum I think).

Gambling transactions normally count as cash withdrawals – read your T’s and C’s as it's this type of thing which catches people out.

Why not try some small transactions on your card – things that you would normally buy anyway – like your normal shopping to get used to how the statements etc work? Try not to go crazy mad! :rotfl: