Easy to understand guide to credit cards?

ter88

Heya,

First time poster on here:j

I've had a credit card for years and used it without understanding how it worked. Shocking I know! I'always paid it off in full so never understood the interest thingy...

For the first time ever I made less than the full repayment last month...went a little too crazy with the spending and spent about 400 on it and could only payback about 300. Long story short I left my job and don't start my new one til next month, in the mean time I've spent nearly four hundred on it again (boiler repairs, what a time to pack in!!) so I'm right up to my limit of £500. (495, woohoo!)

So what happens now? I've read every guide online and can't understand how it works still? So much for my maths D gcse...

In the past I've gone right up to my 500 limit and paid it off in full, no funny charges or anything. Just really worried as I dont know if I'll get charged interest and itll take me over the limit or something crazy.:eek:

Any help lovely people? Thank you. x

Terri

[Deleted User]

depending on when your statement is due you need to make a £10 payment now to avoid interest taking you over the limit,as for interest lets say the apr is 18% divide that by 12 equals 1.5% so you will pay 1.5% per month interest on the outstanding balance each month e.g o/s balance £400 interest that month £6,balance following month £300 interest £4.50

ter88

Woodbine I (literally) don't know how to thank you.

So let me get it right..

Before: I spend 400, pay off 400 - I can't get charged any interest. I keep spending and paying off in full and I never get charged.

Now: I get charged interest on the bit I didnt pay off (around 400 minus 300, which is 100), which at 2% for the month is £2?

So this £2 is stuck on to my current balance taking me down from 495 to 497?

They should really really teach this sort of thing to people at school

Thanks again!

CLAPTON

ter88 wrote: »

Woodbine I (literally) don't know how to thank you.

So let me get it right..

Before: I spend 400, pay off 400 - I can't get charged any interest. I keep spending and paying off in full and I never get charged.

Now: I get charged interest on the bit I didnt pay off (around 400 minus 300, which is 100), which at 2% for the month is £2?

So this £2 is stuck on to my current balance taking me down from 495 to 497?

They should really really teach this sort of thing to people at school

Thanks again!

no

try reading the T&Cs of your card ; in some cases the rules are shown on the back of your monthly statement

but you are charged interest on the daily balance at the daily rate from the time you make the purchase to the time to pay the debt off.
however if you pay in full each and every month then the interest is waived.

so in your case, you are charged interest on the 400 from the date of purchase until you actually paid the 300 and then you are charged on the remaining 100 until you pay that off.


so more than £2

ter88

CLAPTON wrote: »

no

try reading the T&Cs of your card ; in some cases the rules are shown on the back of your monthly statement

but you are charged interest on the daily balance at the daily rate from the time you make the purchase to the time to pay the debt off.
however if you pay in full each and every month then the interest is waived.

so in your case, you are charged interest on the 400 from the date of purchase until you actually paid the 300 and then you are charged on the remaining 100 until you pay that off.


so more than £2

Thanks and I'm really sorry but I still don't understand So even though I paid off 300 I get charged interest for 400 for two months? Ahhh its so confusing!

Does anyone have a youtube video or anything where I can see the sums?

I've tried asking my friends and they don't have a clue.

Ohh I think I get it - so it will be 2% of the 400 which is £8 for the month leading up to when I paid 300, plus another 2% of the remaining 100 which is 2, and add them together to make 10?

CLAPTON

ter88 wrote: »

Thanks and I'm really sorry but I still don't understand So even though I paid off 300 I get charged interest for 400 for two months? Ahhh its so confusing!

Does anyone have a youtube video or anything where I can see the sums?

I've tried asking my friends and they don't have a clue.

No

you get charged interest on the daily balance

so you only get charged on the 300 from the date you made the purchases to the date you paid the 300 off;
you then get charged interest on the remaining 100 from the date you made the purchase to the date you pay in full.