Credit Card Basics Help

wapow

Hi there

Need help with the basics of a credit card.
So here is what i know so far -

I can get a card with 14 months 0% interest.
My limit will be £2000
0% on purchases.
Dont know what a bank tranfer is? Lol oops....

I now do all my spending on the card which equates to £2000 in a week. This is because thats all i will be using the card for.

So is it like im borrowing the £2000, and then paying it back in monthly instalments?

If i pay it all off before the 14 months are up, am i allowed to do that?

I've heard theres like a minimum payment each month? What does this mean? So like, each month I HAVE to pay a minimum of £50 and then i can pay whatever else on top of that?

Its just like a loan from the bank right? With minimum monthly payments each month?

Thanks

CLAPTON

there are two types of 0% CC promotions

firstly on purchases
secondly on balance transfers (BTs)

which is your card?

wapow

Updated main post
0% purchases

CLAPTON

ok

you will receive a monthly statement which will tell you the minimum payment you must make and the pay date

make sure you pay at least the minimum before the pay date as otherwise you will lose the 0% rate

and of course pay the full amount before the 0% period runs out: this may not be the same as the monthly pay date

wapow

CLAPTON wrote: »

ok

you will receive a monthly statement which will tell you the minimum payment you must make and the pay date

make sure you pay at least the minimum before the pay date as otherwise you will lose the 0% rate

and of course pay the full amount before the 0% period runs out: this may not be the same as the monthly pay date

So there is a minimum payment....AND a monthly payment to make on the pay date? The pay date is each month?

McKneff

You can make as much of a payment as you like as long as it is not below the minimum payment.

Make sure you send your payment well in advance of the due date, I would suggest a week to be safe.

You could set up a standing order to take the payment but watch the end date when the last payment will go out.

CLAPTON

no, there is a minimum monthly payment which must be made by the monthly pay date

Fruit_and_Nut_Case

wapow wrote: »

I can get a card with 14 months 0% interest.
My limit will be £2000

Correct me if I'm wrong but reading these lines makes me think that you don't actually have the card yet. That makes a big difference.

You may apply for the card but there's no guarantee that you'll get it. If you do get it, the card issuer will set the credit limit; it may not be £2000.

wapow

Fruit_and_Nut_Case wrote: »

Correct me if I'm wrong but reading these lines makes me think that you don't actually have the card yet. That makes a big difference.

You may apply for the card but there's no guarantee that you'll get it. If you do get it, the card issuer will set the credit limit; it may not be £2000.

Why does it make a big difference?
Im fine for getting the card there is nothing in the way of bad credit or the like. Also, the credit limit is an example.

The dynamics dont change. There is a monthly payment, a payment date and the end of the 0% term as far as i can tell from the responses so far.

So what point is it youre trying to make?
I know my limit could be less.
I know my 0% interest term could be less.
I know i may be rejected.

But in this example, im not rejected, i have 14 months 0% interest on purchases and a £2000 credit limit. So.....

wapow

McKneff wrote: »

You can make as much of a payment as you like as long as it is not below the minimum payment.

Make sure you send your payment well in advance of the due date, I would suggest a week to be safe.

You could set up a standing order to take the payment but watch the end date when the last payment will go out.

You mean the end date when the 0% ends?

Ok so basically, i get a monthly statement yes?
The statement says how much i borrowed, what owe back, what i MUST pay as a minimum.

Each monththe minimum changes deending on how much ive spent.

Aslong as i pay the minimum off before the due date the minimum payment is due, then im ok to carry on like larry?

R_P_W

If you were to get a 0% purchase card today and then you go off and spend £2000 on whatever you like then next month (roughly) you will receive a statement and a request for payment. The minimum payment is normally a certain percentage of the outstanding balance owed (quite a low one from cards I have had). You MUST pay this minimum payment on time or you will lose the 0% rate and start paying interest on the balance.

As the miniumum payment is a % of balance and you are on 0% this minimum payment should go down very slightly each month as long as you keep making the payments on time.

It is a debt that you have borrowed from the bank. You have to pay it back and if you dont within the 0% period then you still probably start paying a hefty level of interest each month.