Cashback Card Confusion

StacFace

I've been looking at the extra ways to make money on here and was considering getting this cashback card (I have a low income so the other cards with higher rates aren't applicable to me): http://bankofireland.co.uk/personal-banking/credit-cards/moneyback/

I just wanted to check how long I won't pay any interest if I pay off the whole amount on time, so that I know that I can use the card to spend what I have in my account only and will definately gain from doing this. How would the direct debit be set up to pay the full amount?

The bit where it says 0% for 3 months is confusing me, does that mean it's at 0% providing I pay back the minimum each month for 3 months and then after that it's only 0% if I pay the full amount each month? As this is what I'm thinking it is but want to make sure before I get it, spend, and then lose out.

I'm 18 and have only ever used a debit card, and I want to be sure I know how it works and will be better off with it before I go ahead with it. I plan to keep track of exactly what I spend on it and make sure I never go over my available balance (I don't have an overdraft).

Paul_Herring

StacFace wrote: »

I just wanted to check how long I won't pay any interest if I pay off the whole amount on time, so that I know that I can use the card to spend what I have in my account only and will definately gain from doing this.

From the blurb on that page "up to 51 days", which in reality means that if you charged something on the day after a statement was produced, there's 51 days before it
a) appears on the next statement and
b) that statement's payment is due.

So, if a statement is produced on (say) the 1st September, and you spend on the 2nd, that spending won't be due until [...] 22 October.

Assuming the next statement is produced on the 1st October, any other spending between the 2nd Sep and 1st Oct wil also be due to be paid on 22nd October.

So realistically you have anything between 21 and 51 days (depending on the number of days in the month) interest free credit.

Of course if you always pay off the full bill every month, you'll never get charged any interest.

How would the direct debit be set up to pay the full amount?

Given the examples above, the balance on the 1st September will be due to be paid on (around) the 22nd September. You'll get your statement nearer the beginning of that period, say the 7th September. As stated above, any further spending between the 1st and 22nd will actually be on your next bill (1st Oct.)

The balance on 1st October will be due on the 22nd, with any spending in the interim being on your November statement.

The bit where it says 0% for 3 months is confusing me, does that mean it's at 0% providing I pay back the minimum each month for 3 months and then after that it's only 0% if I pay the full amount each month? As this is what I'm thinking it is but want to make sure before I get it, spend, and then lose out.

Yes, but beware, the end of the 3 months will unlikely coincide with a payment due date (22nd in the examples above.) If, say, it's the 15th, then on that month, if the balance isn't cleared by the 15th, and you clear it on the 22nd, you'll be charged interest not only that month, but even if you clear it off on the 22nd, you'll be charged trailing interest on any balance between the 22nd of that month and the date you clear the next bill.

I'm 18 and have only ever used a debit card, and I want to be sure I know how it works and will be better off with it before I go ahead with it. I plan to keep track of exactly what I spend on it and make sure I never go over my available balance (I don't have an overdraft).

One other thing you must bear in mind - due to how the billing cycles work (as explained above) - you won't necessarily have the full credit limit to spend 'each month,' - you have to work with two periods; the time between your statement being produced and that statement being paid, and the statement being paid and the next statement being produced; and your limit in each period will change:

Lets say you have a card with £1,000 limit.
Your balance on 1st Sep (and thus payment due on 22nd) is £600. You have only £400 limit left to spend until your payment goes through on the 22nd.
If you spend £350 by the 22nd, then after your payment you have a limit of £650. If you spend £200 by the 1st Oct, your balance (and thus bill) will be £550 to be paid by 22nd Oct, leaving you with only £450 limit until then.