Credit Card Explanation (In Simple terms)

ColdAsIce

Dear all,

I have a credit card with Capital One, ive recenltly opened the account last month etc.

Had a few questions would like a simple awnser tried looking online but the awnsers seemed more complex.

Whats is a Balance transfer? is that shifting one credit card debt to another card paying a small variable rate of interest?

Apr- Now with Capital one i believe its 34.9% APR would that only apply if you made minummum payments, how does minummum payments work etc.

Capital one advised, my credit limit may increase but it depends on how well i maintan my account, do they look at how much you spend on the account accordingly?

Also with withdrawals there is a handling fee, however there is a cash interest calculated on a daily basis, how would you get rid of this, would you need to settle up with the credit card company and pay off the relevant monies before doing anything? I believe purchase interest is different to that of Cash withdrawing interest etc. If i do pay interest, does that effect my credit score.

They didnt tell me clearly about the cash interest, so as a gesture of good will they will credit any interest as it was a new account setup, but i know now for the future not to withdraw cash like that. Will this effect my credit?

Ive mentioned in previous threads i applied for Virgin credit card, but didnt get accepted, think its because of me being honest, as well as not earning enough.

Does the search stay on my credit file for one year?

Also if i did maintain my account and kept up to date, do you think i could apply for a better mainstream credit card at a smaller rate of APR? or again does it depend on income, do you advise i keep the card for 6-12 months before applying, I might go for a Student Credit card but possibly next year depends really.

Look forward to responses, sorry for the silly questions etc and long thread.

CLAPTON

A BT is when you transfer a balance from onc CC to another.. obviously you would only do this if the second card had a lower APR .. there is usually a 3% fee too.

You pay interest on a daily basis from the time you make a purchase to the time to pay it off. If however if you pay the full balance each and every month they cancel the interest.
So set up a DD for the full amount and never pay interest.

If you withdraw cash then they charge you a fee (often 3%) and interest is charged from the time you withdraw to the time the bill is completely paid off.... so never withdraw cash from a credit card.

The purchase APR is usually less than the cash APR.

A couple of searches on your creidt file do no harm.
They drop off after a year.

Once your credit rating improves i.e. you always make payments on time then its likely you could apply for a CC with lower APR.
But why ever do you want to reduce your standard of living by paying interest to CC companies... utter madness.

ColdAsIce

Thanks Clapton, basically i needed the cash but obviously im not going to pay any sort of interest.

I was curious thats all really.

In terms of applying of card, ive only got a part time job would that go against me when applying for a card, thats why i think i didnt get accepted for Virgin due to my income. I m earning around £2,000 per year hrs been cut, however im needing the card just for emergencies, my circumstances have changed within the income do i need to inform Capital One of this?

How does minummum payment work also?

CLAPTON

When applying for a CC then your income is very important.
Some cards have a minimum salary stipulation and all will determine the credit limit depending upon your financail circumstance.

Once you have one there is no need to tell the CC company of changes to your situation.

Minimum payments depend upon the T&Cs of the card but are typically a percentage say 3% of the balance.

so if you spent £75 during the month then, when you receive your bill it will show the £75 and tell you the minimum payment say £2.25 although sometimes there is a minimum of say £5.

However you will then start being charged interest which will show in your next statement... so always pay in full.
CC aren't for emergencies... that's the roll of savings.

ColdAsIce

Dear Clapton,

I rang up Capital One they advised me they would indeed refund me the withdrawn trailing interest, im not sure if they guy understood me, but hes going to refund me the £3.00/3% handling fee AS WELL, i would have to pay it off this month as its on my statement, however i would have a credit of £3.21 on my account for next month. Wow was in luck, dont know if the guy understood or what they had written on the notes oh well.

Dont know what was written, i suppose he did as a gesture of goodwill and advised not to take out any cash on credit card again, a lesson learnt indeed i think.

Also is it true, that the credit that is remaining on the account can pay off the traiiling interest for the following month? Also would this effect my credit in any way just out of interest.

Any help would be appreciated on this,

Regards,

ColdAsIce