Credit Card Question....Newbie!

SpeedyBoots

Hiya,

Recently I have opened a credit card account with Capital One, with the idea in mind of me building up my credit score.

Now, I have hit a problem. The limit on my card is £200, which I have used £198 of in the first month of using.

I cannot afford to pay the whole £198 off in one go this month, and I have heard that doing the minimum payment is a bad idea. I can however afford £100 of the balance.

Also, if I pay the minimum payment, half of the payment or the whole ammount, is my credit limit set back to the £200 or does it have to be paid off in full before any more credit is available on the card?

Sorry, I'm new to all this.

Thanks,

SB

udydudy

SpeedyBoots wrote: »

Hiya,

...Now, I have hit a problem. The limit on my card is £200, which I have used £198 of in the first month of using.

I cannot afford to pay the whole £198 off in one go this month, and I have heard that doing the minimum payment is a bad idea. I can however afford £100 of the balance.

Also, if I pay the minimum payment, half of the payment or the whole ammount, is my credit limit set back to the £200 or does it have to be paid off in full before any more credit is available on the card?.......

Your credit limit at any point in time is £200. So if you have spent £198 the you have only £2 credit limit available to spend until you repay them some or all the money spent. When you pay an amount your limit available to spend will be £2 plus the amount of repayment. So if you pay £100 on the card next month. Until you pay that £100 your available limit is only £2. Once you paid the £100 and you wait for the amount to show up on your card account,this is important as it can take 3-5 working days before it shows up on your credit card account. Once the payment shows on your card account then your limit available will be £102(i.e the £2 not yet spent and £100 you repaid).

I hope that makes it clear.

PNPSUKNET

word of caution the above is correct, but dont get no where near the credit limit as the intrest will take you over.

opinions4u

SpeedyBoots wrote: »

Now, I have hit a problem. The limit on my card is £200, which I have used £198 of in the first month of using.

Your first act has damaged your internal score with Capital One. You've had the card two minutes and you've run off to the sweet shop and spent it all. This will set the alarm bells ringing when it comes to future requests.

I cannot afford to pay the whole £198 off in one go this month, and I have heard that doing the minimum payment is a bad idea. I can however afford £100 of the balance.

First of all, if there is an interest charge due make a paymment fast, otherwise the interest will take you over the limit and you'll get hit for a £12 charge and a negative report could be placed on your external credit file.

Then pay as much as you can within the due period outlined on the statement to reduce the balance and any interest charges that may be due.

Also, if I pay the minimum payment, half of the payment or the whole ammount, is my credit limit set back to the £200 or does it have to be paid off in full before any more credit is available on the card?

Your limit is £200 all the time until they change it. If you owe £198 then you have £2 to spend.

If you owe £198 and they charge £4 interest, your are over your limit and they will apply another penalty fee - typically £12.

If you owe £198 and pay £100, but they then charge £4 interest, you owe £102 and you have £98 left on your limit.

Next month don't use the card. Pay the balance off in full. Then repeat the following month.

After that, only buy things with it that you have the money to pay for. Clear the balance in full every month. Don't go near your credit limit. You will then find that you have improved you credit rating instead of damaging it - and there is a risk at the moment that you could trash it.