Escort boy Posted July 9, 2007 Share Posted July 9, 2007 Hi guys, how does all this interest malarkey work? If you buy £300 worth of stuf in a month and then you have a direct debit which pays off the balance in full does that mean you essentially get interest free cash on those purchases or do you have to pay a charge for buying things and then you get charged at the end of month also on the balance? I've never really fully understood how it works and if it's worthwhile getting one purely to get extra interest on money in my savings account and improve my credit. Cheers =) Link to comment Share on other sites More sharing options...
bluliz Posted July 9, 2007 Share Posted July 9, 2007 Hi guys, how does all this interest malarkey work? If you buy £300 worth of stuf in a month and then you have a direct debit which pays off the balance in full does that mean you essentially get interest free cash on those purchases or do you have to pay a charge for buying things and then you get charged at the end of month also on the balance? I've never really fully understood how it works and if it's worthwhile getting one purely to get extra interest on money in my savings account and improve my credit. Cheers =) You buy goods with the card, at end of month you get a bill, couple of options, you must pay a minimum amount, mines £5 or 5% of the debt which ever is the biggest. Your theoretical £300 would mean a £15 minimum. You only pay intrest if you dont pay off all the balence, so leaving £285 until the next bill will incur 1/12 of your intrest on that £285. Adding on the intrest next month will take you up to £288-289 ish If you pay off all the balence as soon as you get the bill, then you will not recieve and intrest charges. I doubt you will save more than a few pence on the money in your savings account by holding it there longer using a CC. It all depends on how much you spend per month, if your out goings are £5000 a month then it will make a difference. Link to comment Share on other sites More sharing options...
Escort boy Posted July 10, 2007 Author Share Posted July 10, 2007 I have a savings account with 6% interest but if you take any money out then you don't get any interest for that month so if I need to take anything out of it I would lose about £10 for that month. It would mainly be to improve credit rating. Does it make all that much difference to your rating? Link to comment Share on other sites More sharing options...
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