Short Term Credit Card Use

Sophie999

I am really useless at working out what credit cards will cost and to be honest they scare me so I never use them.

I do have a credit card - its a Lloyds Avios and it says that my current standard rate is 15.94% and that I have to pay 2% of the balance every month.

I want to borrow £2000 for a six week period after which I will pay it off in full.

How do I work out how much this will cost me overall? Many thanks for any help anyone can offer me. I am struggling to work it all out!

YorkshireBoy

Shouldn't cost you any interest at all if you time the purchase right, ie make it the day after statement date...assuming your card offers more than 45 days interest free? You'll then have 6-8 weeks to settle the balance.

Chrysalis

it will cost you nothing if you time it right.

Each card offers up to 60 days interest free credit, how it works is that you spend the money, then you get up until the end of the "next" statement to pay it off in full to avoid interest.

So e.g. if your statement date is the 15th of each month and you spent that £2000 today, then you get until the 15th of june to pay it off to avoid interest. Which would be just over 6 weeks.

PeacefulWaters

Good advice above.

Worst scenario, with some rounding by me:

£2,000 X 16% = £320 a year.

Divide by 12 months is £27 a month.

Multiple to 1.5 months is £40.

Nil is achievable.

Sophie999

That's good news. Many thanks, for the replies.

IF I go over the 6 weeks and it goes to 8 weeks (hopefully not). What would I have to pay on top of the £2000?

Thanks again.

YorkshireBoy

Sophie999 wrote: »

That's good news. Many thanks, for the replies.

IF I go over the 6 weeks and it goes to 8 weeks (hopefully not). What would I have to pay on top of the £2000?

Thanks again.

Using the rough calcs in post #4, it'll be £54 (less a bit because you'll make some sort of payment, rather than full).


But the more you pay off and the sooner you pay it will both reduce the interest charged (obviously!).


So £54 should be worst case scenario.

Sophie999

Thanks all, really appreciate the help.

robber2

its not clear from your first posting whether you plan to spend £2k on your card or withdraw £2k cash. The second option will not be free as lloyds would normally start charging you interest for cash withdrawals from day 1

Chrysalis

yes the interest free is for purchases, so a retail transaction.