Advice appreciated on my financial situation.

theoretica

Does it fit that the car finance comes out on the last working day of the month? As the 31st is a Tuesday there is no reason for it to be early this month.

If you do need cash work out exactly what it would cost you to take it out on your credit card before thinking about payday loans. I expect the payday loan would be the more expensive.

Shocky

theoretica wrote: »

Does it fit that the car finance comes out on the last working day of the month? As the 31st is a Tuesday there is no reason for it to be early this month.

If you do need cash work out exactly what it would cost you to take it out on your credit card before thinking about payday loans. I expect the payday loan would be the more expensive.

Hi theoretica,

It does seem to fit that the car finance comes out the last working day of the moment.
It seems that I would be charged 3 percent transaction free and the interest would be around 33 percent to withdraw cash from credit card. i have a capital one classic card at the moment.

theoretica

So borrowing £200 cash for 2 weeks would cost you something around £9 from the card. I doubt you would find a payday loan that cheap.

Shocky

theoretica wrote: »

So borrowing £200 cash for 2 weeks would cost you something around £9 from the card. I doubt you would find a payday loan that cheap.

I didnt relise it would cost so little to withdraw cash from credit card. Does the cost of £9 increase if you dont pay the full balance off each month? I have an outstanding balance of £1500, therefore I only pay £80 a month.

theoretica

Of course it costs you more the longer you have the debt- so if you have to borrow more on your credit card you want to repay it as soon as you can. You were talking about only needing the money briefly so right after payday you would pay the £200 back as an extra payment as soon as you can to cut the interest. Credit card debt costs you a lot by hanging around, but is OK for a short emergency.

allybee101

£9 is a lot to pay for cash!

Have you had any luck finding out when car finance is taken (will it be after payday)? Are Orange happy to delay payment a few days?
Is your landlady happy to accept payment after payday too?

If these are all sorted then I'm confused about the need for cash from CC.

CC companies pay off the highest interest last so that highest rate of interest will be applied for the lifetime of the balance on your card.

E.g say your card has £200 cash withdrawn at 33%, £1000 card purchases at 22%.
Total balance £1200.

You will pay the card purchases off first and only then will they clear the cash withdrawal (regardless of when each transaction was made. So until you reach a zero balance, £200 of your outstanding balance will always be charged at 33%.

This is why they tell you not to use a 0% balance transfer card for more purchases as the interest on the purchases will be applied until you've cleared the full balance.

Hope this makes sense

Shocky

allybee101 wrote: »

£9 is a lot to pay for cash!

Have you had any luck finding out when car finance is taken (will it be after payday)? Are Orange happy to delay payment a few days?
Is your landlady happy to accept payment after payday too?

If these are all sorted then I'm confused about the need for cash from CC.

CC companies pay off the highest interest last so that highest rate of interest will be applied for the lifetime of the balance on your card.

E.g say your card has £200 cash withdrawn at 33%, £1000 card purchases at 22%.
Total balance £1200.

You will pay the card purchases off first and only then will they clear the cash withdrawal (regardless of when each transaction was made. So until you reach a zero balance, £200 of your outstanding balance will always be charged at 33%.

This is why they tell you not to use a 0% balance transfer card for more purchases as the interest on the purchases will be applied until you've cleared the full balance.

Hope this makes sense

Hello Allybee,

Thanks for the helpful advice. Ive cancelled my Orange direct debit and payed using my credit card. My landlady is happy to wait for my rent until payday. Ive yet to get in touch with anyone regarding the car finance. I will try again tomorrow.
Ive never withdrawn cash from my credit card, therefore was unsure how it worked. Your explanation makes sense to me

theoretica

allybee101 wrote: »

CC companies pay off the highest interest last so that highest rate of interest will be applied for the lifetime of the balance on your card.

This is no longer true. It was changed as one of a number of reforms fairly recently.

I hope you can get through this without needing to borrow more, but if you do read your small print and work out what the debt will cost you.

Shocky

theoretica wrote: »

This is no longer true. It was changed as one of a number of reforms fairly recently.

I hope you can get through this without needing to borrow more, but if you do read your small print and work out what the debt will cost you.

Thanks for the information theoretica. It was my initial opinion that CC companies paid off the highest interest last. Its great that this is no longer true.