In need of some guidance. May well be a silly question.

Lee86

I just wanted to know, if you pay off the full balance on a credit card within a month of a purchase are you charged any interest on that purchase or any interest of any kind? I've never had a credit card before and my knowledge of how they work is limited to say the least.

Basically i have quite a poor credit rating and i believe this may give it a little boost if i can prove i can keep up with payments, and i'm confident that i can. Obviously though the only credit cards i can get are around 40% APR and i don't want to be paying that much interest on top of any payments i make, wether on time or not.

Also can you set up direct debits, i.e car insurance and bills to be paid from a credit card the same as you would with a debit card?

Hope i don't sound too much like a moron and hope someone can help. Thanks!

CannyJock

Lee86 wrote: »

I just wanted to know, if you pay off the full balance on a credit card within a month of a purchase are you charged any interest on that purchase or any interest of any kind? I've never had a credit card before and my knowledge of how they work is limited to say the least.

Your credit card statement will show the payment due date. So long as you pay the bill in full before this date (see your T&C for payment clearing times) you won't pay any interest on purchases. Don't stick the card in an ATM to withdraw cash on, don't use the card at a forex bureau, don't use the card to make a deposit to a gambling site - these all count as cash advances which are charged interest immediately.

Lee86 wrote: »

Basically i have quite a poor credit rating and i believe this may give it a little boost if i can prove i can keep up with payments, and i'm confident that i can. Obviously though the only credit cards i can get are around 40% APR and i don't want to be paying that much interest on top of any payments i make, wether on time or not.

Definitely pay the balance in full each month. Consider setting up a DD for the full amount and make sure that you have enough clear funds in your account to meet the bill each month.

Lee86 wrote: »

Also can you set up direct debits, i.e car insurance and bills to be paid from a credit card the same as you would with a debit card?

Nope, but you can set up a Continuining Payment Authority (CPA) which gives the company permission to charge you on an ongoing basis - most online subscriptions work this way. There are posts on here every other day from people who set them up and have a hard time cancelling them, so consider very carefully before you do this. Personally, I avoid them and just use the CC to make one-off payments (also cheaper for car insurance to do it this way).

Keep reading the posts on the forums and you'll soon see the things that catch people out on a routine basis so you can avoid them.

Lee86

Brilliant! Thanks for your help!