Anyone knowledge about credit cards that could help me out?

Pandilex

I got a credit card in January last year, and it came with 13 months interest free credit. They said that my interest free period ends on the 21st of February.

I'm trying to work out how much I need to pay off, as I misbudgeted by thinking it was 15 months which made me put some money into an ISA instead of paying it off.

So I want to pay the minimum amount off... I phoned them up (tesco) and the woman was pretty clueless, and also seemed desperate to get off the phone.

If I paid my current balance off (lets say it's 1000 quid) then on the 21st I won't be in debt so presumably I won't incur interest, is that right?

However, if 200 quid of that 1000 was done during this current period (which is up to 21st feb) presumably it wouldn't incur any interest, so I could pay 800 off now, and the rest off next month. Does that sound right?

It's all gotten very confusing due to my silly error!

All help is appreciated

angelsmomma

If you don't pay it all off before the interest free ends then you will pay interest on any amount left.

Pandilex

the reason I doubt that is because if I bought something on the 19th I wouldn't expect to pay interest on it 3 days later

angelsmomma

You signed up to a specific period of 0%. That is about to end. When it does you will pay interest on any amount you have not repaid according to the T&C's

Your answer about other spending comes under a new set of T&C's as you will be out of the 0% period.

blacksta

angelsmomma wrote: »

You signed up to a specific period of 0%. That is about to end. When it does you will pay interest on any amount you have not repaid according to the T&C's

Your answer about other spending comes under a new set of T&C's as you will be out of the 0% period.

well spoken, i guess it is called cascading payments

bengal-stripe

If you do not pay off your balance in full (and the interest-free promotion has ended) you will be charged interest from the day a charge hits your account to the day it's paid. Interest is calculated on the daily balance, added up and charged monthly.

In your case you will be starting to pay interest from February 22nd on the balance of this day and every day thereafter (unless you have paid the whole of last month's balance prior to February 21st).

Pandilex

So if I bought something for 1000 quid on the 20th of feb, on the 21st of feb I'd have to pay a massive chunk of interest? I thought credit cards gave you until the next month to pay it off...

bengal-stripe

Credit Cards are only interest-free if you pay off the full monthly balance before the 'payment due' date.

nesco

It does. But the when you make a payment for the previous balance, it pays for the recent purchases. So you still pay for interest for the remaining balance. Best to pay it all off before the statement Cut off date and do the purchases after statement cut off which will give you about 40-60 days depending on the next statement cut off day.

Pandilex

Yup, so my question is, are transactions from 22nd of last month (which was the start of the billing period) until 21st of feb (end of the billing period) liable for interest on the 22nd of february? Normally items in each billing period must be paid by the 10th, so in that case, the 10th of march, but because interest free is coming to an end, it messes things up a bit. It would mean I can't use my credit card for a couple of weeks until it sorts itself out, or I'd have to pay interest immediately as soon as I've bought something (which is bonkers).

I think I will just try and pay the full lot off, and not bother using the card for a month or two until I can figure it out.

Paul_the_Painter

It's not the interst-free coming to an end that is messing things up, it's that you haven't paid off the balance. If you pay the whole balance off before the end of the period, and only then start using the car "normally" everything will be fine.

If you don't pay all of the balance off, but only pay off say £800, you will pay interest on the remaining £200 for every day that the balance remains outstanding.

Under the "old" credit card rules it was much worse, if you had used the card during the last year, you would have ended up paying interest for all you purchases, until you had cleared the card totally (promotional balances came off 1st)