Credit card problem

Jemma0244

Hi there,

I applied for a crediy card april last year before i went on holiday as the hotel advised me id need a credit card for incidentels. I applied for my credit card on tbe basis of me paying it straight off after my holiday! The card i applied for was a and 0% interest monthly for 14 months with a £800 limit I came back off holiday paid it straight off but then silly me started to use it for things i didnt need and just paid minimum payments as i knew there was no interest anyways to cut the story short the bank gave me an increase to £1,300 and im now out of the interest free period with £1.218 on my card. My interest rate is 21.95% which is quite high! Last month i had a less interest on my statement than i have this month yet i have less on my card as i paid more off! I feel stuck as i didnt really know anything avout the card when i applied for it which was really silly! And now i feel like my interest is gonna be higher every month even though im paying more off. Im so conffused can somebody help! Im thinking of paying £250 a month so will this decrease my interest?

I sound so clueless to even have a credit card-

Thanks

sourcrates

Hi,
You pay interest on your outstanding balance, on a daily basis.

21.9% is what the average man in the street would pay, low interest rates are mostly for people with excellent credit records, interest on credit cards can be as high as 59.9% in some cases.

If you reduce your balance significantly, you will pay less in interest, but only do this if it's affordable.

Brightspark87

Right firstly - have you thought about applying for another 0% card for transfers and cutting it up as soon as it arrives so you arent tempted? Plus the card you have transferred of course! This may help you as you pay off the £250 more quickly? You have to learn from this lesson though and only use them the way they are meant to- good luck x

ReadingTim

Brightspark87 wrote: »

Right firstly - have you thought about applying for another 0% card for transfers and cutting it up as soon as it arrives so you arent tempted? Plus the card you have transferred of course! This may help you as you pay off the £250 more quickly? You have to learn from this lesson though and only use them the way they are meant to- good luck x

For someone such as the OP who seems not to know how credit cards work, this is an absolutely awful bit of advice. They lack the financial education to make this plan work, and it can only end is tears.

OP - pay off as much of the credit card balance as you can afford each month until it's gone. Then, only put on the credit card what you can afford to repay each month - the statement must be paid off in full every month, as CC's are a very expensive way of borrowing money. If you can't afford it, don't buy it (or at least save up until you can afford it). Think of a credit card as simply a cash card, but one where the money comes out of your account a few weeks later, and you won't go wrong.