Credit cards explained???

swany_99

Hello All,

I am 30 and never owned a credit card as always viewed it as an easy way to get into trouble. I am a very money head (some might say tight/misrable) but i see it as sensible. I go away a bit with work and occassionally pay for my own accomodation and meals and claim it back off the company but currently i pay this direct out my bank account and get claimed money back with 3 weeks. I want to use a credit card for doing this to keep my cash flow good but don't know the ins/outs of they ie the aprs/interests. i one for instance is 10% and i pay within the month am i right in saying i dont pay ANY interst on credit card?

just cant see how credit card company make any money if people pay in sufficent time (maybe alot of people dont)

answers would be appriciated.

opinions4u

For most cards:

1. Spend on card e.g. hotel bill, travel, meals (but don't withdraw cash).
2. Get bill.
3. Clear bill in full within three weeks or so. But never pay late.
4. Pay no interest.

A card with cashback or a points scheme will pay you for using it that way. Might not get one of those straight away though. Your own bank might be the best starting point.

http://www.moneysavingexpert.com/cards/cashback-credit-cards

just cant see how credit card company make any money if people pay in sufficent time (maybe alot of people dont)

50% of cardholders pay interest.

chattychappy

swany_99 wrote: »

just cant see how credit card company make any money if people pay in sufficent time (maybe alot of people dont)

Because they take a commission. That's why in some businesses where profit margins are tight you are sometimes required to pay extra if paying by credit cards. For normal shops this is not such an issue. Indeed there is a cost to handling cash too.

And, of course, people sometimes don't have enough to pay at the end of the month. Or choose to take up other offers.

swany_99

so all in all if i pay by allocated time i will pay NO interest except if places charge for using credit cards?
i would be better obtaining a cash back or points card if i can get one?
is there any drawbacks i should know about?
any recommendations on cards?

swany_99

also whats the difference between the following;

Balance transfers and purchases as seen a card with 0% on balance transfers for 16mths and 0% on purchases for first 3 mths???

Andystriker

The way forward for you is,

Get a credit card (I would get one from your current bank). Make sure you pay off in full by the due date each and every month, and you will then not pay any interest.

Note - If you are a day late in paying them back, you will incur interest from the day the purchase was made, (so not just one days interest), so be vigilant.

I always pay my credit card off in full one full week before the due date, that way I can check on-line that they have received the payment.

A 0% balance transfer card means that you can transfer an existing balance from another credit card to the new card and pay 0% interest for however long the deal is, but you MUST pay the minimum balance due each month.

A 0% on purchases means you pay no Interest on what you purchase with the card for however long the deal is, but you MUST pay the minimum balance due each month.

You will be ok if you pay off the card in full each month and you pay it off in full by the due date.

Good luck