Eeek! My first credit card.

Jami74

I have just applied for my first ever credit card. It is a Tesco one and the reason being is that I work there and tend to do my shopping over the course of a week which means I have lots of small transactions on our bank statements. My idea is that all Tesco purchases (including petrol) will be done on the Tesco credit card and then at the end of the month I'll pay it off which means we only have one payment coming out of our main bank account to Tescos. This will also give me a much better idea of how much I am actually spending a month (probably more than I earn there). I have a couple of questions.

Will I only pay for what I buy if I pay it off in full every month or are there hidden extras?

It says '0% on purchases for 12 months'. Does that mean if I don't make a payment I won't incur any charges?

nzseries1

Jami74 wrote: »

Will I only pay for what I buy if I pay it off in full every month or are there hidden extras?

If you pay the balance in full every month, then you will pay nothing else other than your purchases. But, if you pay less than the full balance, even 1p less, you will pay interest on the full amount from the time of purchase until the time of payment.

Jami74 wrote: »

It says '0% on purchases for 12 months'. Does that mean if I don't make a payment I won't incur any charges?

No, you still have to make the minimum payment, which is around 3% of the total balance each month. But, you will not get charged any interest on the outstanding balance for the first 12 months.

I'd just like to add that from what I've seen on the forums, the Tesco CC can be a difficult card to be accepted for. You may not be accepted if you have never had credit before. If you find that you are not accepted, I would try applying to FlyBE, Aqua, Capital One, or alternatively whichever bank you have your current account with.

jenny2009

You will have to pay the minimum payment every month and you won't get charged any interest for a year. And if you miss a payment you will lose the interest free term and become liable for all the interest.
Any balance left at the end of the year will start to be charged interest at the then current rate.

Your best bet is to pay the balance off every month if you can afford it.
Jenny

CannyJock

Jami74 wrote: »

This will also give me a much better idea of how much I am actually spending a month (probably more than I earn there).

jenny2009 wrote: »

Your best bet is to pay the balance off every month if you can afford it.

And not to spend more than you can earn/afford If you miss a payment then they'll charge you fees, revoke the 0% promotion and record a missed payment on your credit report.

Remember when you're getting used to credit cards for the first time, that the money you see in your bank account isn't all yours - it's easy, especially with a family to rack up over a thousand a month in purchases and not realise because there's still plenty of money in the bank.

One suggestion that suits some people is to open a separate bank account and as you pay for something with your card, put the money aside in that bank account to make the card repayment. If that's something you could see yourself doing then let us know, there's a way you can actually make money doing this with your card

Jami74

if you pay less than the full balance, even 1p less, you will pay interest on the full amount from the time of purchase until the time of payment

Wow! That's harsh!

And not to spend more than you can earn/afford

No we won't, thanks. We try to be as careful as possible and have a big overdraft facility. The idea is that we'll spend the same amount but only make one payment out of our normal bank a month instead of lots. I'm thinking it will help increase our credit rating, we're hoping to get a mortgage oneday.

wizk1

Jami74 wrote: »

Wow! That's harsh!

It's not harsh, it's just business. After all, even though you have every intention of paying the full balance when the bill comes in, you're still borrowing money from that company. Hence why it is called a credit card