Credit Card terminology in simple terms

ColdAsIce

Dear all,

Ive had a Capital One card for around 2 months now,

Wanted to ask how did Balance transfers work?

Also how does the minummum payment system work

As well as the cash interest?

Im quite new to credit cards, is it advisable i keep the card for around 12 months to build up my credit ensuring all my payments are made on time. So that i then apply for a more mainstream card or shall i try for another card with a cheaper rate of interest.

I incurred cash interest etc, will this effect my credit in the future as i withdrew cash i knew the charges etc.

Moggles_2

I'm quite new to credit cards. Is it advisable to keep the card for around 12 months to build up my credit [rating] ensuring all my payments are made on time, so that I then apply for a more mainstream card?

Yes.

... or shall I try for another card with a cheaper rate of interest?

I'd give yourself chance to get used to the one you have first.
There's quite a bit to learn, as I think you realise

Moggles_2

I incurred cash interest etc. Will this affect my credit in the future, as i withdrew cash? I knew the charges etc.

Using a credit card to borrow cash from ATMs is a bad idea.

Not only are you charged a high rate of interest from the date of the transaction plus handling fees, the payments you make afterwards are allocated to other transactions first, leaving cash withdrawals trapped on the card attracting interest.

As a general rule, I would avoid mixing cash and purchases on a credit card except as a very last resort

CLAPTON

if you wish to improve your credit rating it is merely necessary to use the card regularly and then pay in full each month

set up a direct debit for the full amount each month and then you will not pay any interest. (unless of course you draw cash as Moggles has explained above)

not only is drawing out cash on a credit card very expensive but most CC companies see regular cash withdrawal as signs of financial problems and so will damage your credit rating rather than improve it.

Basically never withdraw cash and always pay in full each month for any purchases.

Moggles_2

How does the minimum payment system work?

I'd avoid making minimum payments to a CapOne card, which charges high interest rates.
Martin's article on the subject should answer all your questions

http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card

ColdAsIce

Fantastic thanks for the advice,

Will not ever withdraw cash, i knew of the charges initially but kicking up a fuss meant they credited me back with £3.21.

However in light of this 40p interest was charged in the following month, i was advised to clear my balance which i did today (as i made the payment on Friday) basically should i wait till my statement is printed to see if the trailing cash interest is still there, ive yet to use my credit card at the moment.

Everytime i ring up Capital One they either advise i dont have trailing cash interest or i do have cash interest, so is it worthwhile for me to check my statement.

I believe what they said was that if there is interest showing on the account, they will write it off e.g. 20p as its not worth paying that via debit card.

In essence can interest accured screw up your credit file, or if you have been paying for it etc.

With my credit card, im going back to University im quite frugal and only use it for small purchases, could i apply for another main stream card e.g. say 12 months down the line or do i need to wait and just stick it out with the capital one card i have.

Also what does it mean by 52 days interest free?

CLAPTON

if you pay in full each and every month and don't withdraw cash then you pay no interest

the 'up to 52 days interest free' means the following

suppose your statement date is 5th of the month

suppose you buy something on the 6th of july say
then it will not occur on your statement until 6th August (30 days later)
you will then be give say 22 days to pay the bill so you have had 52 (30+22) interest free money.