JD Williams Credit limit

almanak

Hi, 
Is anyone able to explain me how to use credit agreement with JD Williams and the credit limit the best to build your credit history and do not pay interests?

Let's assume I get credit limit of £150.
Should I make my purchase immediately? Does the rule of using 25% of your limit apply here?
So the best purchase would be  for around £37? Isn't it a little to small?

Should I set up direct debit for the amount doubled than minimum payment? So if they require £5 as minimum it should be £10?
Can I not use it at all for some time?
Will that build my credit score/history if after purchasing I will pay for the item in full before the due date?

[Deleted User]

You just need to use what you need to and clear it in full each month.

williewonder

I have a Jacamo account which is JD Williams.

I started with a £150 limit. On my ClearScore spending the whole £150 didn't have an impact on the 25% limit. it doesn't register if you spend the whole £200. But my credit cards do the % thing,

I set to up to pay the minimum amount. I have never missed a minimum amount payment. You have to facter in with JD Williams even if you pay half your balance they will still take the minimum amount payment even when they say they won't, so make sure you have money in your account.

Make sure you pay your balance after your statements generates.

In 14 months my credit balance has gone up from £150 to £1200. I sometimes don't pay if off in full. This doesn't seem to have had an negative affect on my credit score. My credit score is looking pretty healthy now.

almanak

williewonder said:

I have a Jacamo account which is JD Williams.

I set to up to pay the minimum amount. 

But if you pay minimum amount you pay the interests? APR is 59.9% !!

Ebe_Scrooge

williewonder said:

In 14 months my credit balance has gone up from £150 to £1200. I sometimes don't pay if off in full. This doesn't seem to have had an negative affect on my credit score. My credit score is looking pretty healthy now.

That's because your credit score is a fictitious number made up by the CRAs purely for entertainment and their own marketing purposes.

As ZX81 said earlier, the "correct" way to use ANY credit card is simply to use it regularly for everyday purchases and ALWAYS pay it in full every month, after the statement arrives and before the "payment due" date.  Setting up a direct debit for the full amount is the easiest way.

Doing this will mean you never pay interest, it will improve your credit history (not your meaningless score), and it doesn't matter how much of your available credit you use.  Utilisation percentages only become significant if you're carrying the debt from one month to the next.

Don't pay the balance off before the statement is produced.  There's no harm as such in doing so, but it looks on your credit history as though you're not using the card, so you lose the benefit of building up a favourable credit history.

almanak

Ebe_Scrooge said:

As ZX81 said earlier, the "correct" way to use ANY credit card is simply to use it regularly for everyday purchases and ALWAYS pay it in full every month, after the statement arrives and before the "payment due" date.  Setting up a direct debit for the full amount is the easiest way.

Doing this will mean you never pay interest, it will improve your credit history (not your meaningless score), and it doesn't matter how much of your available credit you use.  Utilisation percentages only become significant if you're carrying the debt from one month to the next.

Don't pay the balance off before the statement is produced.  There's no harm as such in doing so, but it looks on your credit history as though you're not using the card, so you lose the benefit of building up a favourable credit history.

JD Williams will not be for everyday purchases as well as Very catalogue (previously SDG I think)  which I consider also now. I think very credit limit  is easy to get as well. I hope having 2-3 catalogues card will be seen positively on my credit history if used properly. Do you have any recommendation for store/catalogue cards for everyday shopping?

Also I dont know what do you mean by paying IN FULL? Credit limit with JD williams is about repaying the whole amount in monthly instalments and the minimum monthly payment is 4% of the total cash price of goods you ordered. This is why I dont quite understand if you need to pay interests in this scenario or not?

Ebe_Scrooge

almanak said:

JD Williams will not be for everyday purchases as well as Very catalogue (previously SDG I think)  which I consider also now. I think very credit limit  is easy to get as well. I hope having 2-3 catalogues card will be seen positively on my credit history if used properly. Do you have any recommendation for store/catalogue cards for everyday shopping?

Also I dont know what do you mean by paying IN FULL? Credit limit with JD williams is about repaying the whole amount in monthly instalments and the minimum monthly payment is 4% of the total cash price of goods you ordered. This is why I dont quite understand if you need to pay interests in this scenario or not?

This is a credit account.  Think of it like a credit card that you can only use at one retailer.  But the same rules apply.  Look at the bottom of their website :

"How it works

If you’ve been accepted for a personal credit account, no interest will be charged if you pay for your items in full by the date show on your latest statement and by keeping your account up to date.

If you choose not to pay the full amount by the date shown on your latest statement and pay the minimum payment, you’ll be charged interest on your total remaining balance.

If you choose to pay just the minimum payment each month, this will cost you more in interest and take you long to pay off than if you paid for your items in full"

So it works just like any standard credit card/credit account.  If you don't pay the full balance each month, you'll be paying interest (and at a much higher rate than a typical credit card).

Yes, it will be reported on your credit file - so, as far as it goes, it's an OK thing in terms of building up a good credit history.  However, it's a hideously (and needlessly) expensive way of doing it.  If you want to make use of their credit facility because you shop there anyway, then fine - but pay the balance in full every month to avoid interest.  This will still show on your credit history (and actually will do more good than carrying a balance from month to month).

If your primary aim is to build up a good credit history, the simplest way is to get a credit card, use it for everyday purchases (food, petrol, whatever), and always pay it in full every month when the statement arrives.  If you're only able to get a sub-prime card then no problem - their interest rates are higher than the mainstream cards, but it doesn't matter.  As long as you pay in full every month, you won't be charged interest.  After a year or so of doing this, you'll have built up a history of responsible borrowing and repayment - which is one of the major factors that will influence your ability to get future credit (and at a better APR) from other lenders.

dr_adidas01

almanak said:

Ebe_Scrooge said:

As ZX81 said earlier, the "correct" way to use ANY credit card is simply to use it regularly for everyday purchases and ALWAYS pay it in full every month, after the statement arrives and before the "payment due" date.  Setting up a direct debit for the full amount is the easiest way.

Doing this will mean you never pay interest, it will improve your credit history (not your meaningless score), and it doesn't matter how much of your available credit you use.  Utilisation percentages only become significant if you're carrying the debt from one month to the next.

Don't pay the balance off before the statement is produced.  There's no harm as such in doing so, but it looks on your credit history as though you're not using the card, so you lose the benefit of building up a favourable credit history.

JD Williams will not be for everyday purchases as well as Very catalogue (previously SDG I think)  which I consider also now. I think very credit limit  is easy to get as well. I hope having 2-3 catalogues card will be seen positively on my credit history if used properly. Do you have any recommendation for store/catalogue cards for everyday shopping?

Also I dont know what do you mean by paying IN FULL? Credit limit with JD williams is about repaying the whole amount in monthly instalments and the minimum monthly payment is 4% of the total cash price of goods you ordered. This is why I dont quite understand if you need to pay interests in this scenario or not?

Paying in full means:

A, you make a purchase with with JD Williams for lets say £20

B, It gets Added to your credit account as that's the method you've chosen to pay with.

C, A statement is produced 3 to 4 weeks after purchase

D, Statement says balance is £20 and that your minimum payment is £5

E, You Pay in full which means you pay the whole £20 purchase off meaning no interest is charged as you have paid in full your £20 balance.

If you don't pay the full balance and only pay the minimum amount then interest will be added on to your next statement for the whole £20 purchase you made at what ever horrendous interest rate they give you.

Which clearly means you will pay interest if you don't pay your balance in full!!

If you don't understand how the account works then you should be thinking long and hard about taking out a JD Williams account as it can if not managed correctly lead you into getting into debt.

Which will seriously damage your credit file.

almanak

Ebe_Scrooge said:

 :

"How it works

If you’ve been accepted for a personal credit account, no interest will be charged if you pay for your items in full by the date show on your latest statement and by keeping your account up to date.

If you choose not to pay the full amount by the date shown on your latest statement and pay the minimum payment, you’ll be charged interest on your total remaining balance.

If you choose to pay just the minimum payment each month, this will cost you more in interest and take you long to pay off than if you paid for your items in full"

So it works just like any standard credit card/credit account.  If you don't pay the full balance each month, you'll be paying interest (and at a much higher rate than a typical credit card).

Yes, it will be reported on your credit file - so, as far as it goes, it's an OK thing in terms of building up a good credit history.  However, it's a hideously (and needlessly) expensive way of doing it.  If you want to make use of their credit facility because you shop there anyway, then fine - but pay the balance in full every month to avoid interest.  This will still show on your credit history (and actually will do more good than carrying a balance from month to month).

If your primary aim is to build up a good credit history, the simplest way is to get a credit card, use it for everyday purchases (food, petrol, whatever), and always pay it in full every month when the statement arrives.  If you're only able to get a sub-prime card then no problem - their interest rates are higher than the mainstream cards, but it doesn't matter.  As long as you pay in full every month, you won't be charged interest.  After a year or so of doing this, you'll have built up a history of responsible borrowing and repayment - which is one of the major factors that will influence your ability to get future credit (and at a better APR) from other lenders.

I guess this example from their pre-contract credit information mislead me:

The total amount you will have to pay.

'As an example, the total amount that you would have to repay would be £191.77. We base this example on a credit limit of £150

and the following assumptions:

· You immediately order items up to the value of your credit limit

· You repay us in 12 equal monthly payments including the interest due

· The standard interest rate on your account does not change

· The agreement remains in place for the whole 12 months

· Both of us fulfil the obligations of this agreement'

You mentioned it is  'hideously expensive way' , I guess you refer to products price there? I was considering only electronics which I plan to buy anyway and having a one purchase a year even will work here I suppose? I will start from small to get higher limit of course. For this reason I do consider very catalogue as initially I've received couple of times higher limit offer (didnt do the proper credit check yet) and the range of products is more interesting.

For standard credit cards it is a CATCH 22 for me. No credit history no card. I only managed to have a mobile plan now and was pretty shocked once rejected it before with very good credit score and salary. For subprime cards it might be the same I think and I do not want to have failed try on my file.

almanak

dr_adidas01 said:

), and it doesn't matter how much of your available credit you use.  Utilisation percentages only

Paying in full means:

A, you make a purchase with with JD Williams for lets say £20

B, It gets Added to your credit account as that's the method you've chosen to pay with.

C, A statement is produced 3 to 4 weeks after purchase

D, Statement says balance is £20 and that your minimum payment is £5

E, You Pay in full which means you pay the whole £20 purchase off meaning no interest is charged as you have paid in full your £20 balance.

If you don't pay the full balance and only pay the minimum amount then interest will be added on to your next statement for the whole £20 purchase you made at what ever horrendous interest rate they give you.

Which clearly means you will pay interest if you don't pay your balance in full!!

If you don't understand how the account works then you should be thinking long and hard about taking out a JD Williams account as it can if not managed correctly lead you into getting into debt.

and this is what I am doing now, thinking long and hard.
In your example paying £6 a month would be ok for not paying interests? I asked at the beginning what amount  to pay is the best so how much percentage more? Twice a minimum pay? So £10 for example or it doesn't really matter for the sake of having good credit history?

Ebe_Scrooge

almanak said:

In your example paying £6 a month would be ok for not paying interests? I asked at the beginning what amount  to pay is the best so how much percentage more? Twice a minimum pay? So £10 for example or it doesn't really matter for the sake of having good credit history?

No.  You pay the FULL outstanding balance.  Anything less and you'll pay interest.  And you'll be paying interest at a very high rate - 59.9% you said earlier.

Using the example you quoted : "As an example, the total amount that you would have to repay would be £191.77. We base this example on a credit limit of £150"

So, you buy an item for £150, pay for it in 12 instalments, you've paid £191.77 for that item.

The only way to avoid paying interest is to pay each month's statement in full.