Minimum Repayments Query

scottishgirl87

This is a stupid question, however, I've never had a credit card in my life and so I'm not entirely sure how they work. I'm considering applying for a 0% on purchases credit card, most likely the Halifax 17 month 0% offer. If I'm successful and spend £1200 on the card, what are the minimum payments going to be? Is it as simple as dividing £1200 by 17 months??

Moneysaverchris

That's correct so long as you stay in the interest free period, however if you haven't had credit before you have little chance of being accepted try capital one!

Chris

[Deleted User]

No - that's incorrect. The min payment will be defined by the lender, but typically will be 1% of balance plus fees and interest, with a minimum amount (eg £25).

Check it on the site of the card you end up applying for.

Moneysaverchris

Deleted_User wrote: »

No - that's incorrect. The min payment will be defined by the lender, but typically will be 1% of balance plus fees and interest, with a minimum amount (eg £25).

Check it on the site of the card you end up applying for.

Sorry i read the question incorrectly! above is correct.

scottishgirl87

Thanks for the replies. So, if I spent £1200 on a 0% card and paid it back with £100 a month, I'll be paying more than the minimum and it won't cost anything other than £1200?

I have my mortgage with BOS so was hoping Halifax accept me but I haven't decided what card/bank to go with.

StuC75

Most will be either a certain % each month, subject to a minimum (ensures the balance will eventually paid off).

The headline offers of 17months may not always be offered to all successfull applicants (only 51% need receive this). Also because the deal ends on the 17month, you typically only actually have 16months if that makes sense (most will quote an effective date - so this could actually by 18 months but on 17 months IYSWIM)..

To 'safely' clear such a balance the safest option is to then have a Direct Debit set for the minimum payment regardless, and then make manual payments either through bank \ online banking for the difference so that you then repay in time.. This is because late payment may(does) result in removal of the promotional rate offer..