That’s why we think it’s a good idea to pay off as much as possible, whenever you can. When making repayments, Claire will end up paying less interest if she can pay more than her minimum amount each month. If Claire pays it back over a longer period, that’s fine too, but she’ll pay some interest, unless she has an interest-free offer.
If Claire can pay off her entire balance before the due date, then happy days – she won’t pay any interest at all. So let’s say Claire’s had a few extra recent expenses, resulting in her credit card spend building up.Įvery month, Claire will get a credit card statement showing her balance, the minimum she needs to repay and when to pay it by. Although you can vary how much you pay back each month above that amount. And you’ll have a minimum monthly repayment you’ll need to make. It’s based on your own situation… and your credit score. This is the maximum amount you can borrow with the card. When you get a credit card, it comes with a credit limit. Interest, which is worked out as a percentage of the money Claire’s used on her credit card.Īnd fees, such as an annual fee or a charge for things like late payments.
Unlike her debit card, Claire’s credit card pays with borrowed money, which then needs to be paid back later.Ĭlaire will be charged for borrowing in two ways: She’s got herself a new credit card to help pay for a few essentials.
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