Shopping at Ikea

dag_2

In the next few days, I plan to buy some furniture from Ikea - definitely a bed frame and mattress, and possibly a sofa as well.

At the moment, the cheapest source of finance available to me is my cahoot flexible loan, at 6.9%.

I pay off the card that I use for shopping each month in full, out of my cahoot flexible loan - and I pay whatever's left of my salary each month after my rent and direct debits into my cahoot flexible loan. That means that if I've spent more in a month than my salary will cover, I won't get stung on the interest - because I still benefit from my credit card's interest free period, and I don't pay more than 6.9% APR thereafter.

I've never shopped at Ikea before, and I don't have a Home Card. My plan is to apply for a Home Card, and then use it to pay for my purchases. When I get the Home Card statement, I will pay it off in full out of my cahoot flexible loan.

But if I don't get a home card, or if the limit they give me isn't big enough to cover my purchases, then I'll have to use either a credit card or a debit card.

If I pay by credit card, there will be a 70p transaction charge - however, I will still benefit from the interest-free period. The purchases will appear on my July statement, and I won't have to pay it until the last full week in July.

If I pay by debit card, then there is no transaction charge - however, my current account will then be overdrawn, at 18.2% APR. I could arrange a withdrawal from my cahoot flexible loan on the same day to cover the overdraft - however, it will take approximately three days to go through. Then I'll be paying cahoot interest, and won't get any interest free period.

So - which is cheaper? Paying by credit card or debit card?

According to my calculations, I figure that if I spend more than £100-ish in one go, it's cheaper to pay by credit card. But if I spend less than £100, it's better to pay by debit card. Three days at 18.2% APR plus one month at 6.9% APR on £100 works out at roughly 70p.

Can anyone check that I've got that right? Thanks.

Also - does anyone know what happens with home delivery? I will have to pay £30 for home delivery - but that's a separate transaction, isn't it? If you pay for home delivery by credit card, do they charge 70p for that as well? Thanks.