I don't understand this "minimum payment" on my credit card

Cellar_Door

Sorry to ask such a basic question--

I have a credit card with ulster bank.
It's well topped up, i.e. the balance is a couple of hundred quid.

Why is my account statement telling me there's a minimum payment of 5 euro?


Another stupid question: I know nothing about credit cards, and I have no interest in getting into debt. The ONLY reason I applied for one is that many online stores and airports only accept credit cards for payment. So, my question is, if I just dump a few hundred quid in my credit card account, can I just forget about it? I'm not paying any interest as long as there's money in the account?

Again, clearly I'm clueless...thanks

drunkmonkey

Leaving money in your credit card kind of defeats the point in having a CREDIT card.
Put the money in your bank account or savings, use the credit card as it's meant to be for interest free credit for 5X amount of days then pay the balance in full by DD if you don't want any interest charges.

I don't know how the minimum payment is saying €5, they must mean if you did have money to pay the minimum you can pay is €5, that probably doesn't affect you as you owe nothing.

NuMarvel

Ulster Bank's debit card might be a better option for you. It's operated by VISA, so it's accepted in any shop or on any website that accepts VISA cards. The money comes right out of your bank account, so you can't spend money you don't have.

Cellar_Door

Thank you for the replies.

drunkmonkey wrote: »

Leaving money in your credit card kind of defeats the point in having a CREDIT card.
Put the money in your bank account or savings, use the credit card as it's meant to be for interest free credit for 5X amount of days then pay the balance in full by DD if you don't want any interest charges.

I don't know how the minimum payment is saying €5, they must mean if you did have money to pay the minimum you can pay is €5, that probably doesn't affect you as you owe nothing.

Thanks.
But remember, like I said, the single reason I have a credit card is that many online stores and airports only accept credit cards, they won't accept my debit card.

NuMarvel wrote: »

Ulster Bank's debit card might be a better option for you. It's operated by VISA, so it's accepted in any shop or on any website that accepts VISA cards. The money comes right out of your bank account, so you can't spend money you don't have.

I have the debit card as well....

So, in a nutshell, if I just dump money into it and hardly ever use it, what's the harm? Genuine question.

whydoibother?

I agree that putting money on your credit card can be a good idea. It's one of the cheapest ways to access money when abroad - much better than using a laser or using your credit card the usual way.

One way of dealing with your credit card is setting up a direct debit from your current account. You never have to think of paying a bill, it just comes straight out like for you like ESB or phone or whatever.

eden_my_ass

Cellar_Door wrote: »

I have the debit card as well....

So, in a nutshell, if I just dump money into it and hardly ever use it, what's the harm? Genuine question.

No harm at all, but like you I'm with Ulster Bank over a year now, I have the Visa Debit and the Mastercard Credit card...which I haven't had to use at all. I have yet to find someone that refused the debit card online or offline including Ryanair, Easyjet, amazon, paypal, etc. and in fact the only reason I nowkeep the credit card (and pay the annual stamp duty for it) is as a backup if i'm ever caught short somewhere.

NuMarvel

Cellar_Door wrote: »

But remember, like I said, the single reason I have a credit card is that many online stores and airports only accept credit cards, they won't accept my debit card.

If it's the VISA debit card, then I'm not sure why it won't work for you. When I had the Halifax card (also VISA debit), I used it everywhere, but maybe Ulster Bank have more restrictions on theirs?

Cellar_Door wrote: »

So, in a nutshell, if I just dump money into it and hardly ever use it, what's the harm? Genuine question.

No real harm. You'll have to pay the governemnt stamp duty for the credit card (€30). Also, having a surplus balance on your credit card is tying up cash that may be useful somewhere else, but as reasons go, they aren't the strongest for advocating dropping the card.

Cookie_Monster

firstly the €5 minimum payment is the minimum you have to pay off the balance every month. If there is no outstanding balance there is no need to pay it. So if you recieve you r statement for June say and there is 125 on the card the minimum you would have to pay off is 5, leaving 120. If you don't pay off the 120 you'll then rack up interest on that after a certain period, at the end of July for example.

Secondly there is no reason to keep the card in a positive balance. By all means if you spend 100 on it pay 100 off but there is no real reason to put 100 on it knowing that some time in the future you might spend 100 on it.

craoltoir

Your debit card will probably have a lower limit than your Credit Card. With Permanent TSB for example you are limited to a maximum of 1500 euro per transaction. So if you want to be able to make a purchase of a greater value the Credit card might be handier.

chris85

No real point in keeping in credit like that all the time, better to just clear in full each month. Also i could be wrong but i have heard if stolen and used the CC issuer will not cover losses on a credit balance.

I use my credit in credit for going abroad as i dont get charged to withdraw from ATMS and get a decent FX rate. This means i can take out money as i need each day rather than carrying extra around which i am not mad on doing.

dublin daz

The main advantage of Credit Card over Debit is when you book a hotel. usually they put a hold on your card which can affect your available balance. If you put the holding onto the Credit Card you wont be affected provided you are within your credit limit.

catch me if you can

get rid of it. ulster bank do a debit card now, its like a credit card and can be used for most credit card transactions

Cellar_Door

Cheers for the good replies

therecklessone

Cellar_Door wrote: »

So, in a nutshell, if I just dump money into it and hardly ever use it, what's the harm? Genuine question.

If somebody fradulently accesses your account and takes that credit balance the bank are unlikely to cover the money you had sitting there.

Take the balance out now, and transfer to an instant access savings account that will at least earn you a few cent interest.