Credit Card

LupusWolf

I'm thinking about applying for an Aqua credit card. I'm just worried that I'll end up in loads of debt. With Next they send me a statement and I pay the minimum balance. However I pay way more then the minimum balance to clear the debt before the 0% finance runs out.

With credit cards, if I get a credit card and spend £100. Their minimum balance would be £5 if it was set to 5% like Next.

However if I were to pay £100 off. Would that incure interest or would interest at 49.95 percent be £149.95. I just don't understand how a credit card would work.

Please advise.

MattTheMoneyGuru

If you take the same approach and pay the balance off in full before the due date you should not pay any interest. Read the T&C's as they will state the number of days before a purchase gets charged interest. Looking at their website it appears to be a maximum of 51 days 'interest free period' if paid off in full.

It's also worth noting that the interest rate you pay is based upon an annual rate, but is calculated daily (if not paid in full) from the date the charge hits the account and then applied monthly. So if you did leave the £100 balance for 1 month, a 49.95% APR Would not equate to £49.95 worth of interest in one month.

I hope that makes sense.

LupusWolf

Thank You Matt, that makes sense.

Superscrooge

LupusWolf wrote: »

I'm thinking about applying for an Aqua credit card. I'm just worried that I'll end up in loads of debt..

Just use the credit card for purchases that you would normally make.

Don't exceed your credit limit

Set up a direct debit to pay the full balance each month - This will prevent you missing a payment and prevent debts from building up.