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Credit Card.. 0% on purchases.. little confused

AwesomeDonkey
Posts: 9 Forumite


Hi guys. New to the forum so please don't bite!
Plus I'm 21 and don't really have any family around for good advice! I've been living independently for nearly 4 years now.
First of all excuse my perceived ignorance. Unfortunately this is not an area I know much about and as I'm sure you are all well aware, credit and banking in general is incredibly complicated.
A quick overview, I would like to purchase some things, and a total cost of this is £1620.
I earn around £1600 a month with outgoings of approx £750.
So I have around 750 a month for "pleasure" spending give or take.
Unfortunately how I've always worked financially, is to work out what I have left after paying any bills, etc. And then I normally spend the rest on whatever takes my fancy. I'm not the kind of person to be able to sit on £400 cash, so saving is not really an option for me. (bad I know!:rotfl:)
Anyway, I was umming and aarring about a credit card, did an application half expecting to get rejected however I actually got approved! :T
I just have a few queries that I'm not sure about and hope that you kind folk would be able to help me out with.
The card in question is an RBS Yourpoints World card. It just happened to be one of the highest listed with 0% on purchases on one of the web pages here. I bank with Natwest but stupidly never thought to apply for the Natwest one.. Even though they are the same company!
Through the application I was granted a credit limit of £1750.
I do not currently nor have I ever previously had a credit card, I'm not so fussed about the balance transfer, just the purchases. While applying on the web, the application timed out as I was trying to do some research. I phoned up and apparently they are sending the confirmation to my address, I just need to fill it back in and sent it back if I want to go ahead.
My query is exactly how the repayment and (any) interest would work.
What my plan in my head was, to get the bits I needed for £1620, cut up the card as so I would not use it again, and then I would have a standing order/direct debit set up, to take £200 a month from my bank and "pay back" this credit card.
However some months I may be able to pay back more than that so I would assume I'd be able to make one-off payments over the phone as and when?
The point being to clear the £1620 before the 13 months is up (I would aim for around 5-6 months).
The query I have comes to the whole terms of minimum payments, paying off balances in full each month.. What I don't want to happen is to end up losing the 0% on the purchase otherwise it could get very messy, very quickly.
It states in some of the terms and conditions that if "balance is not paid off on time then you would receive interest.."
Unfortunately I can't post links..as new users are spammers.
Would the "balance" each month be simply what is known as the "minimum payment" or would the "balance" be the £1620?
I'm trying to get what I would like in the smartest way possible and just, as I'm new to this, am unsure as to exactly how credit cards.. "work".
Much appreciated for the help.
-Donkey.

First of all excuse my perceived ignorance. Unfortunately this is not an area I know much about and as I'm sure you are all well aware, credit and banking in general is incredibly complicated.
A quick overview, I would like to purchase some things, and a total cost of this is £1620.
I earn around £1600 a month with outgoings of approx £750.
So I have around 750 a month for "pleasure" spending give or take.
Unfortunately how I've always worked financially, is to work out what I have left after paying any bills, etc. And then I normally spend the rest on whatever takes my fancy. I'm not the kind of person to be able to sit on £400 cash, so saving is not really an option for me. (bad I know!:rotfl:)
Anyway, I was umming and aarring about a credit card, did an application half expecting to get rejected however I actually got approved! :T
I just have a few queries that I'm not sure about and hope that you kind folk would be able to help me out with.
The card in question is an RBS Yourpoints World card. It just happened to be one of the highest listed with 0% on purchases on one of the web pages here. I bank with Natwest but stupidly never thought to apply for the Natwest one.. Even though they are the same company!
Through the application I was granted a credit limit of £1750.
I do not currently nor have I ever previously had a credit card, I'm not so fussed about the balance transfer, just the purchases. While applying on the web, the application timed out as I was trying to do some research. I phoned up and apparently they are sending the confirmation to my address, I just need to fill it back in and sent it back if I want to go ahead.
My query is exactly how the repayment and (any) interest would work.
What my plan in my head was, to get the bits I needed for £1620, cut up the card as so I would not use it again, and then I would have a standing order/direct debit set up, to take £200 a month from my bank and "pay back" this credit card.
However some months I may be able to pay back more than that so I would assume I'd be able to make one-off payments over the phone as and when?
The point being to clear the £1620 before the 13 months is up (I would aim for around 5-6 months).
The query I have comes to the whole terms of minimum payments, paying off balances in full each month.. What I don't want to happen is to end up losing the 0% on the purchase otherwise it could get very messy, very quickly.
It states in some of the terms and conditions that if "balance is not paid off on time then you would receive interest.."
Unfortunately I can't post links..as new users are spammers.

Would the "balance" each month be simply what is known as the "minimum payment" or would the "balance" be the £1620?
I'm trying to get what I would like in the smartest way possible and just, as I'm new to this, am unsure as to exactly how credit cards.. "work".
Much appreciated for the help.
-Donkey.
0
Comments
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:wave: Hi Donkey and welcome
As long as you pay AT LEAST the minimum each month (set up a direct debit) then you will have (if this is what you have been offered) the 0% for 13 months.
You seem to have the right idea by overpaying (you could/should set up a standing order for this extra payment) and aim to get it cleared before the end of 0% period.DEBT FREE AND PROUD'Better to remain silent and be thought a fool than to speak out and remove all doubt'0 -
Much appreciated for the response!
Another query would be the setting up of this direct debit.. I have a loan out of which I have £4500 left (of a total of £10k I took out). I'm making those payments happily and have basically forgotten about it.
When I took that out I was given a direct debit agreement then. So payment goes out of my bank on x day. Was all simple and easy.
Is that the same process with the credit card? Would I get a document in the finalization pack where I can set up a direct debit and an amount? Or would it, by default, not take anything until I use the card, and then it would start taking the minimum payment and then I would have to call up and change the direct debit amount?
Sorry for all of the questions0 -
Hi, that's ok.
You need to set up the direct debit yourself. If there's no form in the pack then you can set it up yourself online.
Make sure you do this as if you miss a payment or you're late paying it they can and will revoke the 0%
p.s----I don't bite........only nibbleDEBT FREE AND PROUD'Better to remain silent and be thought a fool than to speak out and remove all doubt'0 -
Thank you very much.
I will look into setting up the direct debit before I use the card then, if I can do that. I think that would be the smartest option to make sure everything goes out on time.0 -
Yes you can. Don't assume it's been done for you (although it may have been if you gave your bank details at the time of applying) always double check as the penalties for being late paying are high!DEBT FREE AND PROUD'Better to remain silent and be thought a fool than to speak out and remove all doubt'0
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I did give my bank details (well, acc number and sort code) as part of the process.
I will double check, call up RBS and if necessary set up a direct debit before using the card, if I decide to go ahead with it.
Mucho apprecation.0 -
sistafromanothermista wrote: »As long as you pay AT LEAST the minimum each month (set up a direct debit)
And for "each month", specifically, if paying manually the payment must be paid after the statement is generated and arrive by the due-by date. Some posters have incurred late payment fees by not making their payment inside this window (which is typically 3 weeks).0 -
Why dont you just save the money you need? from what you have said it would only take you a couple of months.
I really would recommend putting money aside each month to build up some savings. Wish I had when i was in my early twenties!
It all seems ok to you now as you are earning - but what would you do if you lost your job0 -
Because while I have £800 of spare money that is literally what I then have to live on for the month. While the rest is "forced" outgoings, that £800 is to cover food, fuel, etc. Sometimes I use £10 of fuel a week, sometimes £100.
Realistically I could save up around £300-£350 a month at an absolute push while still enjoying a good quality of life, and it would be around April/May before I would have it saved up. Too long. Besides it's the end of the world in a month
I rent a house, I have other financial commitments, if I lost my job then I'd be in the proverbial anyway.chattychappy wrote: »And for "each month", specifically, if paying manually the payment must be paid after the statement is generated and arrive by the due-by date. Some posters have incurred late payment fees by not making their payment inside this window (which is typically 3 weeks).
What I would do is to get a direct debit set up for the "minimum payment" to be taken on or a couple of days after my (monthly) payday, and then I can call up manually as and when to make the larger one-off payments monthly (or do that at my bank). That would work right?
Would that work/is that a good idea?
I have a feeling I will return the application, after going through the terms and conditions, make sure the 0% interest rate is as advertised, before using the card will set up a direct debit for the minimum payment (which would be nothing I presume, until I use it). If I decide against the credit card then I would simply cancel it, and as I haven't used it there should be no fees.. ?0
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