paying a credit card? - the basics

dodgy123

Hi,
This question seems really dumb but I've never had a credit card before and I've just applied for a Tesco Card & I bank with Barclays.


Do most people just set up a minimum payment direct debit (so it's not forgotten) and then pay off the rest of the monthly balance when using one out of the interest free period? Or can the credit card company just set up an auto direct debit that takes the balance?


My plan is to use it for my grocery shopping/internet purchases for 6 months and then spend the next 12 of the interest free paying off the balance easing my way out of my current overdraft. So hopefully no spending when it's charging interest anyway. Does this seem like a sensible idea?


Will just using it at the start the credit cards life adversely effect my credit rating?


Thanks for your help in advance


Matt

grumbler

dodgy123 wrote: »

....Or can the credit card company just set up an auto direct debit that takes the balance?

Yes, normally you have at least two options for the DD: minimum and full.

My plan is to use it for my grocery shopping/internet purchases for 6 months and then spend the next 12 of the interest free paying off the balance easing my way out of my current overdraft. So hopefully no spending when it's charging interest anyway. Does this seem like a sensible idea?

It does, but even more sensible it would be after clearing the overdraft to keep adding money to some savings account and then pay the credit card off at the end.

Will just using it at the start the credit cards life adversely effect my credit rating?

No

springdreams

Have you considered a money transfer from one of the credit cards that offers 0% money transfers (e.g. MBNA) to pay off the overdraft, then pay off the credit card.

More info here:

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

:money:

dodgy123

springdreams wrote: »

Have you considered a money transfer from one of the credit cards that offers 0% money transfers (e.g. MBNA) to pay off the overdraft, then pay off the credit card.

More info here:

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

:money:

Thanks that's a good idea, the 4% fee will work out slightly cheaper than a couple of months overdraft charges and the knowledge that spending on it will cost a fortune will remove any temptation :-)
£1000 @ 4% = £40 fee
62 days @75p = £46.50 overdraft charge