Trick for making minimum payment??

MyLittleChickadee

Hi all, wondering if this "trick" I've just come up for paying my credit card minimum payment with will work??
For the next couple of months I will be short of cash each month as there is not enough overtime at work. I always pay at least the minimum payment on my credit card which is around £100 per month. In order to 'avoid' paying this I had an idea to make a purchase on the card which I would be spending anyway and pay that off as my minimum payment?
For example I currently pay my council tax by direct debit however if I change this to manual payments and pay it on the credit card, approx £140, then I pay that £140 out of my bank, I'm assuming that would count as the minimum payment cleared for that month?
The current balance is 0% interest so no worries there and because I would be paying the council tax balance within the same month, I don't think there would be any interest on that either. Just wondering if this would actually work in practice?
I understand that I wouldn't be reducing the real credit card balance at all, but it's only to get me through a couple of months. Just trying to avoid the minimum payment becoming additional debt until overtime is back up!
Any thoughts?
Slightly worried that the credit card company might not like it if they see a pattern emerging?

eskbanker

MyLittleChickadee wrote: »

The current balance is 0% interest so no worries there and because I would be paying the council tax balance within the same month, I don't think there would be any interest on that either.

Does your deal include 0% on purchases being made now or was it an earlier balance transfer one? If you don't have 0% on purchases made now then you will incur interest on purchases if you don't pay the balance in full, which is a downside of mixing spend with 0% balance transfers....

lisyloo

I don’t any problem with it, but a little concerned about your budgeting.
You appear to be reliant on overtime which isn’t guarantee,
I would suggest doing a statement of affairs, listing everything you spend and starting a thread on the dealing with debt board, they are good at coming up with suggestions.

I did something similar recently to plan my pension and it only took me about 10 mins per month to put my credit card and bank account spending into categories e.g. travel, entertainment.

[Deleted User]

You can do that, though it's not really a trick. You just need to make sure you're always making the minimum payment or more each month.

The minimum payment may be more of less than the purchase you've put through.

Remember that your council may not accept card payments, or it may be treated as a cash advance.

MyLittleChickadee

eskbanker wrote: »

Does your deal include 0% on purchases being made now or was it an earlier balance transfer one? If you don't have 0% on purchases made now then you will incur interest on purchases if you don't pay the balance in full, which is a downside of mixing spend with 0% balance transfers....

The balance is all a money transfer so 0% interest. Will I still incurr interest even though there will only be one purchase and that purchase will be cleared in full?

MyLittleChickadee

lisyloo wrote: »

I don’t any problem with it, but a little concerned about your budgeting.
You appear to be reliant on overtime which isn’t guarantee,
I would suggest doing a statement of affairs, listing everything you spend and starting a thread on the dealing with debt board, they are good at coming up with suggestions.

I did something similar recently to plan my pension and it only took me about 10 mins per month to put my credit card and bank account spending into categories e.g. travel, entertainment.

Thank you, good idea

MyLittleChickadee

Deleted_User wrote: »

You can do that, though it's not really a trick. You just need to make sure you're always making the minimum payment or more each month.

The minimum payment may be more of less than the purchase you've put through.

Remember that your council may not accept card payments, or it may be treated as a cash advance.

Good point.
If not council tax, I'm sure I'll be able to use something else from my 'normal bills' to cover it.

eskbanker

MyLittleChickadee wrote: »

The balance is all a money transfer so 0% interest. Will I still incurr interest even though there will only be one purchase and that purchase will be cleared in full?

Yes, unless you have a deal that's specifically 0% on purchases, then interest on purchases will be charged if you don't pay off the entire balance in full.

A month's interest on £140 (plus a bit of trailing interest next month) is unlikely to be a massive amount but it will be a cost incurred by what you're doing if you don't have a deal that includes 0% interest on purchases, which is why the usual MSE guidance is not to spend on 0% balance (or money) transfer cards....

enthusiasticsaver

I would be more worried that you can only make minimum payments if you get overtime. That indicates a wider debt problem. I suggest you do as lisyloo suggests and look at your overall budget to compensate for lack of overtime. You need to get your finances on a more sustainable footing as your OP suggests you are living month to month and relying on overtime to cover your outgoings which is not the best way to budget. Do you have savings?

Jakerrs

MyLittleChickadee wrote: »

Good point.
If not council tax, I'm sure I'll be able to use something else from my 'normal bills' to cover it.

Forgetting the other concerns raised in this thread, some councils allow you to pay council tax at the Post Office or at shops via PayPoint, where you would be able to use credit cards (although I'm not sure if using a CC is technically allowed).

I'm able to do that with my council, however they require you to get a cash swipe card from them which takes a few days to sort out, so make sure you allow for that if required.

phillw

MyLittleChickadee wrote: »

For example I currently pay my council tax by direct debit however if I change this to manual payments and pay it on the credit card, approx £140, then I pay that £140 out of my bank, I'm assuming that would count as the minimum payment cleared for that month?

What do you mean by "count as the minimum payment cleared for that month?"

The minimum payment is calculated as a percentage on the statement balance, it has nothing to do with how much or how little money you add to the balance each month.

You could choose to add ten times the minimum payment or nothing to the statement balance every month, they'll just calculate a new minimum payment the next month.