How do I work out my minimum monthly payment?

Chris22

Hi moneysavers!


Just a quick question I wanted to be sure I'm working out my minimum monthly payments out on my first credit card. Here's the deal anyway,

I passed my driving test 10 months ago and got a £3000 loan over a year to pay for my first car and year of insurance, however I went with Elephant and took advantage of their 'pay for ten months, get a years no claims at the end deal', without really thinking that there'd be a 2 month overlap between still paying the loan and this years insurance. Anyway, for this year I got the Natwest Classic Credit card which offers 13 months 0% on purchases and balance transfers. Right, so I got a years insurance, this time with Admiral (and saved over £600 :j ) and how I want to work it is pay the minimum off my card for the next two months (29th April and 29th May) and then, when the loan is finished divide the balance by 10 and pay the rest off over the year. However, credit cards are new to me and I want to be sure i'm paying off enough for the next two months.

The minimum payment is:

Each month, the greater of:
(i) interest, default charges, 1/12 of your annual fee (if any) and 1% of your remaining balance (excluding any
remaining part of the annual fee); or
(ii) £5

My balance is £1,031.85 and I need to know what the hell part (i) works out to.

Interest : If i've got 0% for 13 months, do I pay any interest?
Default charges : not existant to the best of my knowledge
1/12 of your annual fee : as far as i'm aware I dont have one
1% of your remaining balance : £10.32 for the first month and slightly less for the second.

If you need any more info to help me here is the Natwest info on the card: http://www.natwest.com/downloads/personal/cc_Classic_summary.pdf

This could be a very effective way of paying for my insurance, and of boosting my credit rating, just need to ensure I get my head around it successfully.

Finally, I activated the card and first used it on 16th April, so does this mean my monthly payments should be made by the 16th of each month (I intend to pay all on the 29th beginning at the end of this month (april). I just want to work out the payments, beginning with the minimum for 2 months and then the remaining balance divided by ten so I can print it out and stick it on the wall in work so I can keep track like I do with the rest of my finances.

Thanks in advance for any help offered.

Dave101t

erm...your statement will tell you?

Chris22

Dave101t wrote: »

erm...your statement will tell you?

I haven't had a paper statement in years and there's nothing showing up on the online section yet. I'm just a bit worried as this is new to me and I don't really have by head fully wrapped around the idea yet, I don't want to miss a payment as I could lose the 0% deal if I did.

chattychappy

Well I reckon it will just be £10.32...

But I wouldn't rely on billing dates/due by dates as having anything to do with the date you first used the card. I would phone them and ask them when the statement/due by date is.

I would pay a little more than the minimum to avoid minimum payment markers on your record.

Chris22

chattychappy wrote: »

Well I reckon it will just be £10.32...

But I wouldn't rely on billing dates/due by dates as having anything to do with the date you first used the card. I would phone them and ask them when the statement/due by date is.

I would pay a little more than the minimum to avoid minimum payment markers on your record.

Cheers, I'll give them a call in the morning to make sure of due dates.
Yeah, i've just been reading in another thread about credit card companies reporting when you only pay the minimum. Guess i'll make it a nice round £20.

chattychappy

Chris22 wrote: »

Guess i'll make it a nice round £20.

£12 sounds round enough to me!!!!

bouncydog1

Hope you set up a direct debit for the minimum monthly payment amount so that the responsibility for collection of the first payment lies with the card issuer.

If it's any help I run a spreadsheet for credit cards, showing amount owing, interest calc (none) and put in a formula to calculate payment due. Then I add in a line to show additional payments.

With some cards you can make additional payments online - with others you have to pay from your bank. The trick is timing the payments so that they all get to the cc issuer on the due date otherwise sometimes an overpayment will stop the following months dd.

If you have a spreadsheet set up and regularly check online you can easily monitor where you are - jsut be organised about it!

Paul_Herring

bouncyd!!! wrote: »

Hope you set up a direct debit for the minimum monthly payment amount so that the responsibility for collection of the first payment lies with the card issuer.

It is usual for the DD setup process to take longer than the due date for the first payment.

I wouldn't rely on the first payment being taken by DD unless it specifically states on the statement (not on online billing - the actual statement) that they'll pick it up by DD.

chattychappy

No need for DDs, plenty of people get into a mess with them. Just remember to pay in plenty of time. If you do use DDs, take care to check the affect of making additional payments and be sure to have sufficient cleared funds in your current account at the right time.

But if you do miss a payment for whatever reason, you will almost certainly lose the deal (though may be able to argue).