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Interest Question
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![[Deleted User]](https://us-noi.v-cdn.net/6031891/uploads/defaultavatar/nFA7H6UNOO0N5.jpg)
[Deleted User]
Posts: 0 Newbie
in Credit cards
If I have a credit card on 0% interest and then after 12 months it is 18.9% APR say.
Does that mean if I spend £20 in July - Then if I don't pay the whole £20 in August I will be charged:
1 - 18.9% on top of the £20
2 - 18.9% of £20 divided by 12
3 - £20
Does that mean if I spend £20 in July - Then if I don't pay the whole £20 in August I will be charged:
1 - 18.9% on top of the £20
2 - 18.9% of £20 divided by 12
3 - £20
0
Comments
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It means that whatever you spend in the first 12 months will not have any interest added. At the end of 12 months interest will be added on the total outstanding at that point. However, remember:
1. you must make the minimum monthly payment each month and
2. you must not go over your credit limit
otherwise you risk losing the 0% deal.
To answer your specific question - it you spend £20 in July then that is what you will owe. Your statement will show a balance of £20. If you make a minimum payment of say £5 when you get the statement, you will owe £15.0 -
Spendingqueen wrote: »If I have a credit card on 0% interest and then after 12 months it is 18.9% APR say.
Does that mean if I spend £20 in July - Then if I don't pay the whole £20 in August I will be charged:
1 - 18.9% on top of the £20
2 - 18.9% of £20 divided by 12
3 - £20
What 18cc said if you are still in the 0% interest period.
I think how it works once you start paying interest is like this:
You spend £20.
£20 x 18.9% = £3.78 (interest per year on £20)
£3.78 / 365 = £0.010356 (amount of interest charged per day on £20)
£0.010356 x 31 (number of days in the month that you owe £20) = £0.329
I might be wrong and if I am I hope someone corrects me because this is how I've been working out interest. But if I'm right then you'd still owe the original £20 plus 33p interest. I also think it depends where in the billing cycle you make your purchase because the number of days you owe might be more or less than 31.Debt Free: 01/01/2020
Mortgage: 11/09/20240 -
If you do not pay off the full statement balance you will be charged 18.9% annual interest, or 18.95% / 365, on a daily basis on the outstanding amount. Purchases will be charged from the date of purchase as by not paying the full statement balance you lose the 56 days or whatever interest free period. On £20 that is about 1p per day.0
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it also depends on what type of interest free card you have.
read your T&Cs, some 0% purchase cards you can buy interest free are for whole duration of the promotional period, so long as minimum payments are maintained, some only offer it for first few months for new purchases0
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