Enlightenment required! :D

supermanjo

Hey.

I stray away from things like Loans and Credit Cards but 4-5 months ago Barclays called me and offered me a credit card with £500 limit on it. I was on the phone just a minute ago to Barclaycard in India and I think the guy got me, and himself confused. So just to clear this up...

I was told that for every purchase I make, it comes with 56 day interest free repayment. If this is the case, then (scenario):

I make a purchase for £100 on the 1st of January, I then make a purchase for £100 on the 1st of February. On the 55th day, I put in £100. And another 55 days later, I put in another £100 (both within the 56 day period.) Does this mean I pay ZERO interest? Making my purchases literally, interest free? So they, in effect, would have lended me free money?

Enlightenment required!

jonesMUFCforever

Me thinks you are slightly confused.
You get 56 days interest free only if you time it properly.
Buy something on the day that your statement is issued (and provided it is not included on this month) then you get up to 56 days until payment is due NEXT month.
It does not apply to all goods you purchase and you must clear the balance in full every month to take advantage of this.

Gromitt

The key here is UPTO 56 days of interest free. Make the purchase after your statement has been printed and pay it by the due date.

Make a purchase a week before your statement gets printed and you get significantly less interest free days.

Like jonesMUFCforever says however, you must continue to pay your bills on time for this to happen. Setup a DD is the easiest way.

If you really want 0% interest on purchases, find a card that offers it as an incentive, like the M&S card that gives you 15 months free - but you still have to pay the required minimum due every month (but all your paying is the amount you borrowed, no interest for the first 15 months of having the card)

supermanjo

I'm sorry, I'm still very confused. My statment comes every month (on the 2nd of every month) so that means I must make payments BEFORE 30 days and not 56 days?

Venusflytrap

Simply put: If you make a purchase on the 29th of Nov and your statement is generated on 2nd Dec then you get fewer interest free days (around 25). BUT if you make a purchase on your statement date - 2nd Dec - this payment will reflect on the next statement date (2nd Jan) and you will not need to repay until abouts 27 Jan. So effectively you will have around 56 days interest free credit.

Make sense?

supermanjo

Venusflytrap wrote: »

Simply put: If you make a purchase on the 29th of Nov and your statement is generated on 2nd Dec then you get fewer interest free days (around 25). BUT if you make a purchase on your statement date - 2nd Dec - this payment will reflect on the next statement date (2nd Jan) and you will not need to repay until abouts 27 Jan. So effectively you will have around 56 days interest free credit.

Make sense?

No.

Why so?

jonesMUFCforever

If you do not understand the logistics do not worry just continue as you are now.

supermanjo

jonesMUFCforever wrote: »

If you do not understand the logistics do not worry just continue as you are now.

Everyone's gotta' learn. I just don't userstand why if I purchase something a few days before my statment, that I loose the 56 day free period and it falls down to 25 days.

MPH80

Because it's not 56 days - it's up to 56 days.

Make a purchase on the date a statement is generated - you'll get the full 56, make it the day before and you'll get the time remaining until payment due date.

What matters is statement cycles. Let's say your statement is always generated at midnight on the 1st of the month - anything bought after that will be on the next month statement. So let's work an example:

Statement generates January 1st.
You purchase an item January 1st
You also purchase an item January 31st.
Next statement is generated February 1st - with payment date of 25th February.

Your item bought on the 1st gained 56 interest free days (providing you have paid your last 2 statements in full and will pay this one in full) - the item bought on the 31st gained 26 days interest free.

Make more sense? They aren't pulling the wool over your eyes here - the key wording is 'up to'.

It_can_get_better

It's too much effort for me to try and make it work in real life, but i understand it as this -

Statement date - 1st Jan
Purchase date - 1st Jan
Next statement - 1st Feb
Payment for 1st Jan purchase must be made by - for example 21st Feb

Count the days between 1st Jan and 21st Feb. That's how many days you get interest free.

Am i right?!

bengal-stripe

supermanjo wrote: »

Everyone's gotta' learn. I just don't userstand why if I purchase something a few days before my statment, that I loose the 56 day free period and it falls down to 25 days.

Let's try it like that: Statement date January 1st.

On that date, the page listing all the purchases of the previous month is taken out and compiled into a statement. A new blank page is inserted, which will list all the purchases coming in between January 1st and the next statement February 1st.

You have done recently two purchases, one hits your account on December 31st, the other hits your account on January 2nd. The December 31st purchase will be entered into the January 1st statement and payment becomes due on January 26th, giving you 26 interest free days (presuming you pay in full). The transaction of January 2nd, will hang around until it gets entered into the February 1st statement, to which payment becomes due on February 26th, giving you 56 days interest free.

So, depending when the statement gets compiled and when a transaction enters your account, interest free can be between 26 and 56 days. (Again. presuming you pay your card in full every month.)

It's all a question of timing.