Making Full Repayments on 0% Card?

brendon

Just today I have received my first credit card. Despite being a student with no other job, my bank guaranteed me a 0% for 12 months card, which I happily accepted. My plan is to build a good credit history for when I leave uni and I'll be using the card to buy my monthly train ticket, etc.

Now, my original plan was to pay off the bill in full each month. But, since this is a 0% card, it would obviously be beneficial (financially speaking) to keep the debt on the card and keep my money in my savings account. Obviously I don't want 'Minimum payment' markers to show up on my credit report, but does less-than-full repayments have an adverse effect on getting credit in the future? I'm a bit lost as to how people typically use a credit card (do most make full repayments?)

matttye

Pay £1 above the minimum payment

YorkshireBoy

brendon wrote: »

But, since this is a 0% card, it would obviously be beneficial (financially speaking) to keep the debt on the card and keep my money in my savings account.

If this card had a £1,000 limit, and you spend linearly throughout the year, then you'll make the princely sum of £8.40 gross interest over the year at 2% AER.

Don't spend it all at once!

matttye

YorkshireBoy wrote: »

If this card had a £1,000 limit, and you spend linearly throughout the year, then you'll make the princely sum of £8.40 gross interest over the year at 2% AER.

Don't spend it all at once!

That's £8.40 gross interest you wouldn't have if you didn't do it though, so might as well

YorkshireBoy

matttye wrote: »

That's £8.40 gross interest you wouldn't have if you didn't do it though, so might as well

I know that (and I do it myself on a much bigger scale), but I'm not 19-20 years old with partying on my mind.

It'll need a lot of self-discipline for 12 months, and for what?...3 free pints next March?

CKhalvashi

YorkshireBoy wrote: »

I know that (and I do it myself on a much bigger scale), but I'm not 19-20 years old with partying on my mind.

It'll need a lot of self-discipline for 12 months, and for what?...3 free pints next March?

A pint's £3.25 in our local now, so less than 2.5 pints :eek:.

I'd do this minimum payment + £1 each month, and chuck the £8.40 in a savings account somewhere, but I'm the one who worked 60+ hours a week through uni, with 2 young children for most of it, so money was really tight.

I've got a CC with £54k limit that's got 8 months before it starts charging interest (current balance half way through, is about £22k), so I'm doing this on a much larger level (and the equivalent interest rate is around 45% here, as it's being kept in our company)

It seems so much better when doing it on a larger level though.

CK

matttye

YorkshireBoy wrote: »

I know that (and I do it myself on a much bigger scale), but I'm not 19-20 years old with partying on my mind.

It'll need a lot of self-discipline for 12 months, and for what?...3 free pints next March?

True! I would only say go for it if he has the discipline not to spend it. Agreed with you there.