Withdrawing Cash on Credit card then using it to pay minimum
Discussion
Morning goatee wearing company directors of PH!
If my credit card balance is 1000 and the min payment is 100 and I withdraw 100 from the card then use the 100 to pay the minimum then pay 100 from my own account so the end balance would be 900 am I getting a lower interest rate?
Would this make financial sense?
Regards,
Craig
If my credit card balance is 1000 and the min payment is 100 and I withdraw 100 from the card then use the 100 to pay the minimum then pay 100 from my own account so the end balance would be 900 am I getting a lower interest rate?
Would this make financial sense?
Regards,
Craig
Where to start...?
Your balance is £1000, you draw £100, your new balance is now £1100. You immediately pay off the £100 you've drawn, plus another £100, as i read it, that means the end balance is now £900.
However, as you have not repaid your full balance the new £100 draw on your card attracts interest from day 1 at the cash rate rather than purchases rate. Typically card t&cs pay off the oldest balance or even chepaest balances first. Thus you will undoubtedly be worse off than if you had paid just £100 off from your cash accounts.
Your balance is £1000, you draw £100, your new balance is now £1100. You immediately pay off the £100 you've drawn, plus another £100, as i read it, that means the end balance is now £900.
However, as you have not repaid your full balance the new £100 draw on your card attracts interest from day 1 at the cash rate rather than purchases rate. Typically card t&cs pay off the oldest balance or even chepaest balances first. Thus you will undoubtedly be worse off than if you had paid just £100 off from your cash accounts.
ellroy said:
However, as you have not repaid your full balance the new £100 draw on your card attracts interest from day 1 at the cash rate rather than purchases rate. Typically card t&cs pay off the oldest balance or even chepaest balances first. Thus you will undoubtedly be worse off than if you had paid just £100 off from your cash accounts.
Bingo! This is where most people don't read the TandC's and get into a horrible spiral. The overall cost goes up terribly if you do that.CraigNewmarket said:
If my credit card balance is 1000 and the min payment is 100 and I withdraw 100 from the card then use the 100 to pay the minimum then pay 100 from my own account so the end balance would be 900 am I getting a lower interest rate?
Why not just use the £100 you already have to make a payment? - end result is still a balance of £900 and you haven't gone through all the hassle of taking £100 in cash, only to pay it straight back again (presumably, you'd have to pay the cash into your bank, then make a separate payment to the card company)Nigel_O said:
CraigNewmarket said:
If my credit card balance is 1000 and the min payment is 100 and I withdraw 100 from the card then use the 100 to pay the minimum then pay 100 from my own account so the end balance would be 900 am I getting a lower interest rate?
Why not just use the £100 you already have to make a payment? - end result is still a balance of £900 and you haven't gone through all the hassle of taking £100 in cash, only to pay it straight back again (presumably, you'd have to pay the cash into your bank, then make a separate payment to the card company)
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