Credit card for the first time

Charr

Hi was wondering if anyone could help clear a few things up for me..

I'm 20, a student working part-time and I need to borrow around £1,000 so have started considering a credit card. I'd obviously be looking towards getting a card meant to be for 'poor credit' or beginners but I just dont understand how it all works, for example;

If I was to borrow £1,000 how much a month would I have to pay back - What do I look at to find this out? - and is the interest rate there if I DONT pay back or do I have to pay that each month whether ive made the repayment on time or not.

I'm sorry if this dosent make much sense, any help would be much appreciated.

paulmcerlean

Plus as a first card you wont get a £1000 limit, more £200 with a 30% + APR.

Ebe_Scrooge

Most importantly, you shouldn't look on a credit card as a "loan" as such. This is probably just about the most expensive way there is of borrowing money.

If you "need" or "want" to borrow £1000, you'd be much better off talking to your bank, or any other reputable lender on the high street, and organise a proper loan. You're more likely to be able to borrow the amount you need, and the interest rates will be far lower. Credit cards should really only be used for very short-term loans - for instance, if you buy a washing machine for £400 and want to pay it back over 2 or 3 months, that's fine, but you should really aim to clear the balance most months on a card ( ideally every month ! ), otherwise you'll be hit with massive interest.

Oh, and your question about the interest - you'll be charged interest on the outstanding balance each month. You MUST make the minimum payment each month ( typically 2% - 5% of the outstanding balance, as a previous poster mentioned ). But whatever balance is left unpaid will go on accruing interest each month. Which is why you should really be aiming to pay all, or at least most, of the balance every month. As I said, a credit card is not really a loan, a proper unsecured loan is a much better prospect if you need the money.