Paying in full

eightiesneo

Apologies for my ignorance, I wondered if someone could explain this to me in plain English.

I got a Vanquis card in an attempt to try and rebuild my shot credit history.

I have a credit limit of £500, and my first statement has been generated after only 2 weeks of receiving the card.

My plan is to only use it for fuel, which equates to roughly £200-£250 a month.

I have filled up once so far, around £40 odd pounds.
My bill has come through and the balance was exactly the amount I'd spent, roughly £40.

However what confuses me is that the due date for the payment is 7th of July.

By the time that date comes round, I will have filled up with fuel twice more so when I make the payment on the 1st, the balance will be around £150.

I guess my question is, for them to class it as being paid off in full, do I only need to pay off the full amount on the statement I have just received of £40?

If I pay £40 which is what the balance is on my statement, when they receive my payment, the balance will actually be £150 but I'm only paying £40, so will I of technically paid it off in full?

Really sorry for the stupidity of this.

Kind regards

Neo

grumbler

eightiesneo wrote: »

...
I guess my question is, for them to class it as being paid off in full, do I only need to pay off the full amount on the statement I have just received of £40?

Yes.

It's easier just to set a DD for the full payment. If you do this, don't rely on it until you see in your statement that the payment will be taken by a DD.

chattychappy

eightiesneo wrote: »

My bill has come through and the balance was exactly the amount I'd spent, roughly £40.
...

If I pay £40 which is what the balance is on my statement, when they receive my payment, the balance will actually be £150 but I'm only paying £40, so will I of technically paid it off in full?

Yes, don't worry. If the balance on the statement was £40, then paying that by the due-by date means you've paid in full. The later transactions (ie £110 odd) will appear on the next statement.

But the credit limit doesn't work on statement periods. The limit is the maximum that can be outstanding (whether it's appeared on a statement or not) at any time. So for limit purposes, you are now at £150 and paying the £40 will put you down to £110.

Although your statement balance was £40 (and paying this is paying in full), knowing your current balance is £150 you are always free to pay anything up to £150. Normally there is no point in doing this - it won't save you interest. But some people might do it if they are getting near to their limit and need to go on spending.

eightiesneo wrote: »

Really sorry for the stupidity of this.

Looked like a sensible question to me!

StuC75

You only have to pay off the statemented balance in full, received & credited to them by the 7th, not on the 7th (some people do push it to the limit of this due date and risk late payment & trailing interest for the month or so after)..

bengal-stripe

"Full Payment" means the statement balance is paid on or before the day due. Any other charges to the card (after the statement got compiled) will appear on next month's statement.

Continue to pay every month in full the bottom line on the statement and there are no interest charges.

eightiesneo

wow, thank you for the quick and informative response everyone, I can't believe I posted the question a few minutes ago and I check 15 minutes later and I have lots of informative and helpful answers!!

That's cleared everything up and I now fully understand how this works.

Thanks again

Doshwaster

bengal-stripe wrote: »

Continue to pay every month in full the bottom line on the statement and there are no interest charges.

The only exception being that if you are foolish enough to withdraw cash on your credit card then you will be charged interest from day one.

psychic_teabag

If you set up a DD to pay in full, and also make additional payments to stay within the credit limit, you need to be aware that they might take the full DD amount on the statement even if you have already paid some off. Different card providers do things differently - some take the full statement amount, others reduce it by whatever has already been paid.

I tend to make an additional payment (just) before the statement is due, so that the statement, and hence the amount taken by DD, isn't too large a fraction of the limit. That makes it a bit easier to ensure that the balance won't go into credit (which I believe the CC companies dislike for some reason ..?). Though my aqua card limit has recently been raised, so I may not have to juggle things quite so much in the future to stay within the limit.

(Being a bit paranoid, I also tend to make the minimum payment manually just after the statement date, just in case the DD doesn't get taken for some reason.)

chattychappy

eightiesneo wrote: »

wow, thank you for the quick and informative response everyone, I can't believe I posted the question a few minutes ago and I check 15 minutes later and I have lots of informative and helpful answers!!

I think it's because it's a refreshing change on here to be discussing locking procedures on the stable door whilst the horse is still present and correct!

Moclin

I use my credit card for fuel and shopping only and pay in full by DD every month. I've done this for over a year now and i;ve seen my credit rating slowly increase each month. It's a great way to boost your credit rating - just make sure you pay off in full every month to avoid any interest charges.

good luck!