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How exactly does a CREDIT card work? Watch

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    I've got a Halifax Credit Card with a credit limit of £1000. Now if I wanna buy something using this credit card, is it true that I won't have to pay back until 30 days later? Or how does this work?

    I just bought something off ebay for £3.68 using my credit card, but in my statement it says I only had £995.66 left. How does that work when £1000 - £3.68 should be £996.32?

    I'm a bit confused.

    I'm basically in need of money before I get my next Student Finance installment on 23rd April, so I thought using a credit card until then and paying it back on the 23rd (which is less than a month from now) would be the best option for me.

    Any help regarding to how this works is highly appreciated
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    Because its a credit card so you will get charged for transactions on some agreements, read up on all the paperwork before using one.
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    Did you include P+P as well as any charge paypal sometimes levys. If you have a premium account etc.

    If your terms and conditions stipulates interest-free and charge free for 30 days. Then yes that is true.
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    Please don't use a credit card if you're a student...

    Not for a £4 purchase...

    Especially not if you don't even know how credit cards work!
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    (Original post by samleigh)
    Please don't use a credit card if you're a student...

    Not for a £4 purchase...

    Especially not if you don't even know how credit cards work!
    This. They can turn out to be very expensive, especially if you always make the minimum payment each time.
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    Why did you buy something that only cost £3.68 with a credit card :confused:
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    They'll say you can pay less when your bill comes through, but make sure you pay ALL of what you've spent if you can or you're going to end up paying way more than what you spent in interest.
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    (Original post by samleigh)
    Please don't use a credit card if you're a student...

    Not for a £4 purchase...

    Especially not if you don't even know how credit cards work!
    The reason I did this was to find out if my credit card works or not. The actual item I'm buying costs around £150. Well, I came to TSR because I don't know how they work and was rather expecting some advice than what not to do (especially when it's already done).
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    (Original post by FranticMind)
    Did you include P+P as well as any charge paypal sometimes levys. If you have a premium account etc.

    If your terms and conditions stipulates interest-free and charge free for 30 days. Then yes that is true.
    Yes I did include P+P and Paypal didn't charge me any extra. I'm only a newbie to credit cards and not to ebay or Paypal.
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    (Original post by theOldBean)
    This. They can turn out to be very expensive, especially if you always make the minimum payment each time.
    Could you explain a bit more about minimum payments? What exactly are these?
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    (Original post by muffingg)
    Could you explain a bit more about minimum payments? What exactly are these?
    If you spend £300 this month

    You will get a bill

    The bill will say that you need to pay a minimum of £15 (% varies between cards)

    So you can just pay the £15 but interest will be charged on the remaining £285

    If you intend to pay the £300 then you will pay no interest
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    (Original post by muffingg)
    Could you explain a bit more about minimum payments? What exactly are these?
    When you get your bill it will have something like (forgive me I don't know exact figures):
    Charges made- £500 <-how much you've spent on your credit card that month
    Minimum to pay- £150

    So, technically you don't have to pay them all of it. BUT whatever you don't pay will be put onto your next bill with interest. I know someone who could only afford to pay the minimum on a £100 bill. A few years later and he owes thousands.
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    (Original post by TenOfThem)
    If you spend £300 this month

    You will get a bill

    The bill will say that you need to pay a minimum of £15 (% varies between cards)

    So you can just pay the £15 but interest will be charged on the remaining £285

    If you intend to pay the £300 then you will pay no interest
    So if I was to buy something for let's say £160 (which I'm thinking of buying) and pay it all back within 30 days, I don't get charged any interest?

    And secondly, does it depend on the number of days (30 days) or does it go until the end of each month (e.g. March 31st)
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    (Original post by muffingg)
    So if I was to buy something for let's say £160 (which I'm thinking of buying) and pay it all back within 30 days, I don't get charged any interest?

    And secondly, does it depend on the number of days (30 days) or does it go until the end of each month (e.g. March 31st)
    Well it would not be 31st of March as you would not even have had a bill by then if you just got the card
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    (Original post by TenOfThem)
    If you spend £300 this month

    You will get a bill

    The bill will say that you need to pay a minimum of £15 (% varies between cards)

    So you can just pay the £15 but interest will be charged on the remaining £285

    If you intend to pay the £300 then you will pay no interest
    They charge you interest on the whole lot if you don't pay it off in full. They like to be sneaky like that.
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    (Original post by TenOfThem)
    Well it would not be 31st of March as you would not even have had a bill by then if you just got the card
    Well, I got it ages ago but never used it. I've had it since September or so. So how do I find out by when I have to repay?
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    (Original post by muffingg)
    Well, I got it ages ago but never used it. I've had it since September or so. So how do I find out by when I have to repay?
    You should be able to log on to Halifax online banking and it will tell you there. Alternatively, have they ever sent you a statement?
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    (Original post by muffingg)
    Well, I got it ages ago but never used it. I've had it since September or so. So how do I find out by when I have to repay?
    Well, you know when you get a bill

    Look at previous bills to see what date interest is added
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    Most purchases on a credit card will be interest free for a minimum of 2 months (56 days).

    When do you plan on paying it back? Is this a fairly short term thing, i.e. you need the item now and can pay for it in 4 weeks or are you going to be paying it off over 4 months or so?
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    (Original post by Aspiringlawstudent)
    Why did you buy something that only cost £3.68 with a credit card :confused:
    Often credit cards offer protection when shopping online that other cards do not. Its actually quite a smart thing to do.

    Credit cards are generally not the kind of thing you want to be using because you "need a bit of money" they should only be used when you have a clear income stream and are basically just using it to avoid problems with cash flow or to simplify your finances. Your problem is you are 1 month short of money so unless your student finance payment is going to be 1 month more money than you need, then you are going to have a 1 month and a bit problem next term. It's not free money.
 
 
 
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