Newbie to credit cards HELP!

supercelt

Hi! New member here looking for some tips and advice on credit cards..

Here's a little background info on my money situation.

I owe around £800 to family (mother and brother) and I would to get these debts paid off ASAP because they have been dragging out a fair deal.

So I was thinking if I use a credit card to pay for things like my car fuel and other things that I would normally use my debit card/cash for, I could repay the card at a more suitable and affordable monthyl rate. This would save me from having to use almost ALL of my monthly wage to pay my mother and brother back. I simply can't do that because I need to get to work and get through the month.

The card would also help to slowly lift me out of my overdraft which I've been sitting in for a few months now.

I would find it easier if I could pay up my debt rather than trying to pay big chunks back and leave myself short for the month. I know that interest charges would gather but this is something I'm happy to accept.

I have no plans to splash out on my credit card with shopping or anything. I know where my limits lie with cash.

The reason I've falled into this debt is because I was studying and earning less than £400 a month. I've recently moved into full time employment and will be earning more than double that so things will slowly be improving.

My main question is - have I got the right sort of thinking here with my plans for a credit card? I hope to pay off half of my debt to my family at the end of next month and the other half the following month with the savings I've made by putting things on a credit card. I know it's not really 'saving' money but I will be able to pay the credit card up at a rate which is more affordable to me.

Here's the card I was looking at ...

http://www.lloydstsb.com/credit_cards/advance_card.asp

Quesiton on that too ... it says 0% interest on purchases for first 6 months. Does this mean that if I was to have say £200 on the card by the end of August then nothing would be added to that from the bank at all until some point next year (even if I only paid the minimum repayments they wanted back on it). Meaning the 11.9 variable they have on it would not kick in until next year?

Please help me out! Cards confuse me a little but I want to be able to manage my money more easily. I hope to be debt free before 2007 so would this card be ideal?

THANK YOU!!!:j

stevenclarkuk

Hi supercelt

As far as interest on your balance, no you wouldn't pay anything more until the 0% offer runs out.

Be carefull though because if you take any cash advances this would incur a high interest rate and if you fail to meet your minimum payments you might loose the right to the 0% offer and start paying interest.

So
1) Don't use the card for cash advances only purchases.
2) Consider setup a direct debit to make the minimum payments as soon as you get your card to ensure you don't miss any payments.

Remember also that once the 6 months is up you will be paying 11.9% on anything that's left.

Steven

supercelt

What is a cash advance? Is this using the card to withdraw cash from the cashmachine?

I only intend to use the card for fuel and other small things.

If I set up a direct debit to repay the minimum payments, would it also be possible for me to go into the bank and pay more of it off if I could afford it?

If for example, by the end of August I had £200 on my card, what would be your estimation of the kind of minimum repayment they would want on that?

jonesMUFCforever

Cash advance is where you take out cash on the card in either an ATM or over the counter at a bank.(Also things like deposits to gambling sites and purchasing foreign currency or travellers cheques)
You can go into your bank and pay any extra amounts off your card at any time.

supercelt

OK thanks for all your help there guys.

Do you think I'm doing the right thing then?

Rebob

You might be better off with a low life of balance transfer deal if the amount is to take a while to pay. There are some good deals if you look around. This way can end up cheaper than an initial 0% deal.

HTH

asandwhen

there are cards out there with a longer 0% on purchases - think sainsburys is 9 months - think there may also be a 12 month outthere somewhere.

trets77

don,t fall into the credit card trap someone giving 3-4K to play with leads to temptation. i know about the i won,t make that mistake is a common defence but i said the same . a tank of fuel here a night out there. it creeps up on you and it,s 10 times harder to pay off your balance when you have cash in your pocket than is to spend your money. i ran up 5K over about 3 years and have spent the last 4 paying it off ( finally cleared it a few months back.) it a graet feeling not to owe them anything. i still have a overdraft though but this
is lot less painful than a bill that lands on your mat every month

there is no shame in being hard up when your young . if it means you are debt free futher down the road IMO. i,ve been flat broke many times and i,m not ashamed to admit it. i see at a rites of passage . you can only really appericate money after not having it

my advice don,t swap a debt with your family for one with greedy heartless credit card company. your family will understand if you have a tough month or it,s xmas. a credit company wants the money in full every month...you miss a payment they will happily charge a nasty £20 for it. your mum won,t.

tough it out pay your mum back as quick as you can then think about a credit card when you can make them work for your gain. £800 may seem like a lot but how will 3-4K seem in comparison. don,t make mistake of others once your in bed with the credit card companys it,s very hard to get out just my opinion

supercelt

Thanks for your comments and advice!

I can understand how easily things could get out of hand if I start spending too much on the card and spending when I shouldn't. I don't plan or intend to though.

I'm still having a good think about though and trying to find out as much as I can about how it will affect me personally.