Credit Card Question

fletcher890

Hi

I have never owned a credit card before but have recently ordered one (BMI Credit card) which I plan to use at the beginning of July (Interest 15.9% PA, 0% on card purchases for 3 months).

My Question is: If I spend £600 on July 1st and pay it off within 3 months (I plan to pay £80 back at end of July, then a further £220 at end of August, then the final £300 at end of September) will I get charged much interest?

My guess is: I will get charged 1/12th of 15.9% of £600 per month until the whole £600 is paid off, thus I will get charged £7.95 per month until it is paid off......am I close or does it work differently?

Also, it says there is a £12 charge for late payments, would this apply to me? (as im taking more than a month to pay it off)

Sorry if this is a stupid question, any feedback will be much appreciated!

IWantToBeFree_2

The late payment is if you don't pay by the date that your statement shows, i.e. for a statement produced on 4th Aug, you may have to make the minimum payment by 29th Aug. If you pay nothing by then you will be charged £12 and you may also have promotional rates withdrawn for not sticking to the T&Cs.

robbo990

If you have 0% on Purchases for 3 months and are repaying within 3 months then you should not incur any interest charges.

lisyloo

If I spend £600 on July 1st and pay it off within 3 months

Be careful about when the 3 months starts.
It does not start from when you decide or when you start making payments.
It usually starts on account opening and in my experience you often have to ring up to find out when this is because it's not provided to you.
I've never had a card company provide this information clearly, but it's very important you understand the dates.

td_007

You need to make sure that:
1. you make the minimum payments for statements of month 1 &2
2. the 0% interest on purchase will not necessarily (almost never) end on your statement date for month 3 and hence the reminder of the balance has to be paid by the 0% end date (call and find out)

Rufus_348

Hello -

Agree with the other posters, you shouldn't pay any interest at all in those first three months. However, you do need to make sure that you make the min. repayment which on this cc is quite high (£25) and also that you're extra careful about using any of the other offers because the allocation of payments clause is quite convoluted.

Let me know how it works out, I was thinking of getting this card for the air miles offer - is that why you got it?

fletcher890

Thanks for the feedback! I feel better about it now.

Yes, I did go for this CC for the airmiles. My friend is actually a pilot for BMI and he recommended it to me. I believe i will be able to get 2 return flights, Europe wide, only having to pay for the airport taxes, it will make a nice change from Easyjet. Once I have recieved the airmiles I will try and remember to let you all know if it was worth it.

Thanks