Paying off as soon as I spend? Right or wrong?

jimjames

Wouldn't a debit card be easier as it means you don't have to bother with moving money about, the payment just comes off your balance?

Sandtree

alewin said:

If the OP is serious about not paying interest because of religious reasons, then surely having a credit card itself should not be allowed.

You should not even agree to the terms, as you are agreeing to pay interest if you are unable to pay or are late with payments. Also you are borrowing money, with interest applied from day one. This is waived if the balance is cleared by the due date.

I've assumed the OP is muslim but that may be wrong... certainly I know they cannot deal with interest or gambling etc however its of no big surprise that people have worked out their ways around this sort of problem...

You cant afford to buy a £10,000 car outright? You cant get a loan because of the 2.8% interest? A Takkaful bank will buy the car and rent it to you for two years for £178.64/month and at the end gift you the car... oddly works out the same as if they'd charged you a 2.8% interest rate but its ok because no interest was applied.

I've seen how these things work for mortgages, tied finance and insurance but not sure if anyone has designed a workaround for credit cards. 

Gerry1

Sandtree said:

alewin said:

If the OP is serious about not paying interest because of religious reasons, then surely having a credit card itself should not be allowed.

You should not even agree to the terms, as you are agreeing to pay interest if you are unable to pay or are late with payments. Also you are borrowing money, with interest applied from day one. This is waived if the balance is cleared by the due date.

You cant afford to buy a £10,000 car outright? You cant get a loan because of the 2.8% interest? A Takkaful bank will buy the car and rent it to you for two years for £178.64/month and at the end gift you the car...

Wow, a £10,000 car for just £4,287.36 !  Where do I apply?

Chino

Ebe_Scrooge said:

But paying off immediately, it appears (on your credit file) as though you're not using the card (as you say, the statement at the end of the month shows zero), so you lose the benefit of building up a good credit history.

Whilst the statement amounts might show as £0, the credit report will show the total amount repaid by the cardholder for each billing period. Thus, any prospective lender will still see that the cardholder has been making regular repayments each month.

Sandtree

Gerry1 said:

Sandtree said:

alewin said:

If the OP is serious about not paying interest because of religious reasons, then surely having a credit card itself should not be allowed.

You should not even agree to the terms, as you are agreeing to pay interest if you are unable to pay or are late with payments. Also you are borrowing money, with interest applied from day one. This is waived if the balance is cleared by the due date.

You cant afford to buy a £10,000 car outright? You cant get a loan because of the 2.8% interest? A Takkaful bank will buy the car and rent it to you for two years for £178.64/month and at the end gift you the car...

Wow, a £10,000 car for just £4,287.36 !  Where do I apply?

Yeah, helps if you press the recalculate button after changing the duration... £428.77