Credit card newby: explain repayment terms

danwednesday

Hi,

I've never had a credit card, I normally just use a debit card, so forgive my rudimentary question...

I'm in the process of doing some rennovation on my house and need about £10,000 more than I have to finish the job off, which I'll comfortably be able to pay off within 12 months although probably won't have much money to be able to start paying this off for the next 3 months or so. I own my house, run my own steady business and have no other debts at all (and never have done, so should have a decent credit rating). So I just need a few thousand pounds as a lump sum in the next few weeks to finish this project, then I can get back to normal and start saving again.

I've seen that there's a M&S credit card which offers 0% interest on purchases for 15 months but I'm not sure if this means that I need to make any interim payments or whether I can just wait and pay the whole lump back in 15 months (or just less than 15 months) without accruing any interest?

Is this my best option for the short term finance I require?

Thanks all

bengal-stripe

danwednesday wrote: »

I've seen that there's a M&S credit card which offers 0% interest on purchases for 15 months but I'm not sure if this means that I need to make any interim payments or whether I can just wait and pay the whole lump back in 15 months (or just less than 15 months) without accruing any interest?

10k is a pretty large sum, you might not get that amount on a first CC, let alone one with the promotional offer of 0 % interest on purchases’.

That apart, even with an interest-free card you have to make your minimum payments, which, depending on the card, can be as low as 1 % per month. Those minimum payments you must pay religiously on time and you cannot, ever go over your credit balance. If you do so, then the promotional deal is off and you’re quite likely to be charged interest, from the day you break the deal (interest is much more than the minimum payment).

Once the promotional rate has ended, you will be charged interest on the outstanding balance (unless you pay the whole lot off). - Good luck!

danwednesday

Thanks Bengal. I was a little shocked to see my credit limit on the Barclays Platinum card, which I just tried to apply for is just £1200. I own my home outright, I've had a profitable business for over 10 years and I've never had a single penny of debt in my entire life, so it's a little disappointing to find out that I have such a low credit rating. It's depressing how things work sometimes - you try and do things right and just get penalised. Anyhow, now to think of a plan b for getting a short term loan.

Tixy

The fact that you have never had any debt in your life is the problem. The banks have no history to look at how well you handle debt. Actually whilst £1200 feels low there are people in not dis-similar situations to you that can only get a subprime card and a limit of £250 or £500.

If you use the card you have been accepted for and show you can handle the credit well etc then in a few months you might well find that they will increase your credit limit. Even if this isn't in time to help you with the current issue it should mean you have a credit history for any future similar issues.

Sorilla

That's why my mom made me to have a credit card so I just payed some bills with it and built up my credit rating. BTW without a credit history I was declined many time while trying to buy a mobile plan in my early college years away from home!