Santander 123 Credit Card - how much am I paying?

LiveOnce

Hi there,

I have a Santander 123 Credit Card and it is linked to my 123 Current Account so that in theory, what I spend on my credit card directly comes out of my current account.

So how does Santander benefit from this? I am paying £2 a month but the 12% Standard interest rate confuses me.

How do credit card work? What is the total you in theory pay?

CLAPTON

LiveOnce wrote: »

Hi there,

I have a Santander 123 Credit Card and it is linked to my 123 Current Account so that in theory, what I spend on my credit card directly comes out of my current account.

So how does Santander benefit from this? I am paying £2 a month but the 12% Standard interest rate confuses me.

How do credit card work? What is the total you in theory pay?

a credit card works like this

you use it to buy things
you receive a monthly statements which will says how much you need to pay: this may be
a. a minimum payment
and
b. the full balance

you may have set up a DD to your current a/c for one of these options (or you can pay directly if you wish)

if you pay in FULL each and every month then you pay NO interest
otherwise you must pay at least the minimum payment and you pay interest on the daily balance

so e.g. if you had 100 running balance you would pay about
100 X 12%/12 = £1 per month in interest

so do you have a DD set up
if so is it for the minimum or the full amount

Neil_Jones

Just a heads up you won't be paying £2 a month or £24 annually in the near future for the 123 Credit Card, that stops at the account anniversary - they all changed that in January to take effect at the anniversary of your account opening and it will change to £3 a month. Yours will probably fall at some point in the next six weeks. Oh and your cashback will be capped from February 2017 as well.

But anyway, in a nutshell Credit Cards you are effectively borrowing the money. You stick your card in the card machine at Tesco and while it will go through, Santander will pay Tesco and you pay Santander back up to a month later.

The interest rate is what you get charged if you don't pay it off in full every month and this is where the bank makes its money by people not paying their cards off or only making minimum payments.

BobQ

The Santander 123 CC is increasingly being marginalised, its quite difficult to find the details on the website now.

If you only use it for the 123 Cashback items it is straightforward to say if it is good value. But many people probably use it for other things and if these amount to a large proportion of your spend it may be better to go for a card that pays cashback on all purchases (like the All in One that pays 0.5%).

ETA Of course Cashback Cards are OK if you pay off the full balance each month. If not the interest rates are usually higher!

colsten

From February 1, they will also be limiting the cashback to a maximum of £3 per category (1% Supermarkets, 2% Department stores, 3% Travel), i.e. after the £3 charge, the max you can possibly earn a month is £6 - and that would require maxing all the categories. The standard interest rate is going up to 15.9%, too.

I have cancelled my 123 CC today as it is no longer value for money to me. They made no efforts to keep me, or to sell me their alternative card.

BobQ

colsten wrote: »

From February 1, they will also be limiting the cashback to a maximum of £3 per category (1% Supermarkets, 2% Department stores, 3% Travel), i.e. after the £3 charge, the max you can possibly earn a month is £6 - and that would require maxing all the categories. The standard interest rate is going up to 15.9%, too.

I have cancelled my 123 CC today as it is no longer value for money to me. They made no efforts to keep me, or to sell me their alternative card.

£3 per category is £9 not £6

PixelPound

BobQ wrote: »

£3 per category is £9 not £6

£6 after the £3 fee has been deducted

I cancelled my 123 c.card too. I phoned up before the anniversary but as it had a balance on their system (I had cleared it by debit card the day before, but they couldn't see that??) so they said it would close at the next statement - I did phone up after I got my next statement date and then got it cancelled as it wasn't.

No_6

Another 2 year person that doesn't know
what they pay on Credit Cards ?

6

LiveOnce

Hi guys

Thank you for your replies.

I have a Direct Debit set-up with the credit card.

Does that mean I am paying nothing?

Sorry I am trying to get clarity.

I also agree that Santander changing their terms all the time on 123 is putting me off keeping the 123 Credit Card. £6 a month is not great. Are there better alternatives?

Neil_Jones

LiveOnce wrote: »

Hi guys

Thank you for your replies.

I have a Direct Debit set-up with the credit card.

Does that mean I am paying nothing?

Sorry I am trying to get clarity.

If your Direct Debit is set to pay off in full then you should be paying nothing in interest.

As to alternatives on the cashback front, check out http://www.moneysavingexpert.com/credit-cards/cashback-credit-cards but nothing around now will get close to the heyday rates offered on the 123 card.