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Credit Card Question

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  • 19-05-2015 11:58am
    #1
    Kiith
    Moderators, Computer Games Moderators Posts: 23,175 Mod ✭✭✭✭


    I'm useless with finance, so just a quick question. If i stick €1500 on my credit card, but don't pay the full amount, what sort of interest will i pay a month? The APR is 19.9%, so is that the annual (i.e. yearly cost), or will i pay 19.9% of the balance every month?

    I've been paying 100% off at the end of the month for years, and need to change that for a few months, so i just wanted to make sure.


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    #2
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #3
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    draiochtanois wrote: »
    This post has been deleted.

    That's simple interest you're thinking of, credit card interest is compounded.

    For an APR of 19.9% you get the 12th root of 1.199 which is 1.01524 so the monthly interest is 1.5%.

    In reverse, if you borrowed €100 at 1% per month, you wouldn't owe €112 after 12 months, you'd owe them €112.68 because of compounding.


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    #4
    Kiith
    Moderators, Computer Games Moderators Posts: 23,175 Mod ✭✭✭✭Kiith


    Actually, just looking at the site the variable APR is 16.12% (typical APR is 19.9%). So I might just stick with the credit card. It'll cost me a bit more, but i'll probably pay it off quicker.


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    #5
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    Kiith wrote: »
    Actually, just looking at the site the variable APR is 16.12% (typical APR is 19.9%). So I might just stick with the credit card. It'll cost me a bit more, but i'll probably pay it off quicker.

    Running with a CC balance for a few months could affect your credit rating, especially if you want to borrow in the near future from the bank which gave you that card. Just be careful and consider a short term loan as an alternative.


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    #6
    Kiith
    Moderators, Computer Games Moderators Posts: 23,175 Mod ✭✭✭✭Kiith


    Cheers, will keep that in mind. Hopefully have it paid in 2-3 months and that won't be too bad. I'd go with the loan, but the sooner i book these flights the better. Plus, i hopefully won't have to borrow anything again for a while :P


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    #7
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #8
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    draiochtanois wrote: »
    This post has been deleted.

    It probably won't affect your rating with the ICB but your own bank (who issued the card) may take a dim view of running a balance on a CC for the simple reason that it's one of the most expensive forms of credit and potentially shows that you are poor on money management.

    The same applies to having Paddy Power or Boylesports entries on your credit card, it's not officially a black mark as far as the ICB is concerned but banks tend to take a dim view when doing an in-house credit analysis of their own customers.


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    #9
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #10
    TorresDaLegend
    Registered Users Posts: 74 ✭✭TorresDaLegend


    Kiith wrote: »
    Cheers, will keep that in mind. Hopefully have it paid in 2-3 months and that won't be too bad. I'd go with the loan, but the sooner i book these flights the better. Plus, i hopefully won't have to borrow anything again for a while :P

    Switch to credit card with 0% on purchases for three months and worry about it in September. Basically a short term interest free loan ie permanent tsb


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