Help confused about min payments!!

mcrfan

Help I'm confused can anyone help?!

My barclaycard is currently at 0% this ends next month. 4k balance at 22.9%
My min payment is currently £179. So will my minimum payments go up or stay the same?
Is interest added on to the outstanding balance or do you have to pay it each month? So if my interest is £152 each month (I know but I can’t get any more credit at the moment) do I then have to pay that PLUS the 2% or whatever it is minimum payment. Or does the amount stay the same just the o/s interest gets added on?
What happens as I am at the credit limit if the interest takes me over the credit limit??

Why is this so confusing or is it just me being dense?!

Mutton_Geoff

From info on the Barclaycard website, your payments will be 2.25% or £5 whichever is greater of the outstanding balance on your statement. Once the 0% interest ends, you'll have the £4,000 balance with approx £76 interest, so £4,076. You must pay them a minimum of 2.25% of the £4,076, usually rounded down, so £91.

I don't know where your £179 payment comes from, you might want to check your figures. If you pay the minimum at those rates on a £4k balance, it's going to take you around 22 years to pay the debt off. Keep paying £179 and you'll be clear in about 3 and a half years.

Payments you make will reduce your balance in the following order:

1. Promotional balance transfers and fees
2. Promotional purchases
3. Interest, fees and charges
4. Standard rate purchases and balance transfers
5. Cash Balance

mcrfan

Sorry made a mistake there - it's actually £8k the balance on my card not £4k sadly. 4k is the balance on my other card.

Could you please help me with the figures for 8k instead?

Thanks v much!

CannyJock

mcrfan wrote: »

Sorry made a mistake there - it's actually £8k the balance on my card not £4k sadly. 4k is the balance on my other card.

Could you please help me with the figures for 8k instead?

Thanks v much!

Try the minimum repayment calculator article listed on the links at the top of the forum: http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

Try it with 8,000, 22.9% APR, and the 2.25% and £5 minimum, then again with the minimum payment set to £ 179 and see the difference.

mcrfan

Mutton_Geoff wrote: »

From info on the Barclaycard website, your payments will be 2.25% or £5 whichever is greater of the outstanding balance on your statement. Once the 0% interest ends, you'll have the £4,000 balance with approx £76 interest, so £4,076. You must pay them a minimum of 2.25% of the £4,076, usually rounded down, so £91.

I don't know where your £179 payment comes from, you might want to check your figures. If you pay the minimum at those rates on a £4k balance, it's going to take you around 22 years to pay the debt off. Keep paying £179 and you'll be clear in about 3 and a half years.

Payments you make will reduce your balance in the following order:

1. Promotional balance transfers and fees
2. Promotional purchases
3. Interest, fees and charges
4. Standard rate purchases and balance transfers
5. Cash Balance

Can I just double these figures to get my answer then I'm guessing as it's 8 rather than 4?
I do have a small cash balance amount on there that will throw things out slightly. But just want to figure out a basic amount so that I know what's coming over the next few months.

Mutton_Geoff

Yes, you can just double the figures. If you use a calculator, you can work out the exact amounts from your actual balance. Be careful the interest rates aren't different on different uses of the card, eg cash advance, purchases etc.

With 8k outstanding, then the figures will look like this:

Balance £8,000 plus £153 interest = £8153 (1.91% or 22.9% /12)
Minimum Payment £183 (of which £153 covers interest, £30 the debt so next month ..)

Balance £8153 less payment £183 = £7970
£7970 plus 1.91% interest = £8122
Minimum Payment £182 (of which £152 covers interest, £30 the debt etc)

Paying down £30 a month on £8k of debt will still take you over 22 years to pay it off, so you should do everything you can to increase the payments. If possible, get a 0% BT card, then keep up the payments of £182 pm. In a year, you'll only owe £6000 as more of your money is used to shift the debt (I've included a 3% £240 BT fee in that calculation as well).

22.9% is expensive money, do whatever you can to get a lower rate.

PS These are rough calculations, so please treat with care, Barclaycard will do the actual calculations based on the exact rates and amount you owe.

To answer your first question, as long as the rate doesn't increase beyond 27% (min payment 2.25% x 12) and you don't spend any more on the card then you won't be in the situation where the payments don't keep pace with the interest alone.

mcrfan

Thank you Mutton Geoff!
I'm just happy that my min payments aren't going up while I get myself sorted. I've had a few blips on my credit history so need to wait a few months before applying for some better deals.

Thanks for your maths!!

Bismarck

Hi...have you tried asking them to fix it at their Life of balance balance transfer rate of 6.9%...it's been done before although you'd need to get through to the loyalty department...good luck...