Is this Credit Card going to cost me?

February 5, 2009 7:17 AM

Could somebody take a look at these terms & conditions of a credit card I am thinking of getting.

I am only considering this card because it belongs to a particular Airline I will fly a lot with over the next year, and I will get their airmiles with each purchase. I always pay any balance on my credit cards in their entirety, as I refuse to pay the ridiculous interest. However, I am worried about item 5 on the above .pdf. Am I right in thinking that I will be paying interest, regardless, on the £ 1500.00 that is mentioned here? And if so, what would this cost me?

posted by wildatheart to work & money (4 comments total)

No, that's an example they use to illustrate the 'total cost of credit' or how much your APR actually stacks up to.

If you're paying your account off in full each time you use it, you've nothing to worry about. Note the first sentence of section 8:

If you pay in full the balance shown on your current statement by the Payment Due Date, you will not pay any interest on Purchases shown on your statement.

Basically, if you treat it like a debit card and only spend money you actually have, not carrying any balance, you're fine.
posted by Happy Dave at 7:24 AM on February 5

While HappyDave may be correct that the £1,500 scenario is merely offered as an illustration, I'd really suggest you contact customer service to make sure.

It isn't identified as an illustration or example. And it really does seem to imply that Citi is going to impose a £1,500 charge up-front that you must pay-off over 12 payments (as opposed to one lump sum) and, thus, also pay them 16% interest on the balance to boot.

I really hope it's just an example, as HappyDave suggests but, given some of the tricks credit card companies employ these days, I wouldn't just assume it's an illustration. Call them and make sure.
posted by Thorzdad at 8:29 AM on February 5

Yes, I would call to check, just in case, as the language is imprecise.

Frankly though, an enforced £1500 charge (for what, exactly?) is almost completely unlikely. They might conceivably have some kind of minimum spend on the card in a year, but I doubt it.
posted by Happy Dave at 8:32 AM on February 5

Frankly though, an enforced £1500 charge (for what, exactly?) is almost completely unlikely.

One would hope. Still...
I wonder if they aren't treating this as an up-front cash-advance or something? Pre-loading the card?
Card companies are doing some pretty weird things to keep their bottom-lines healthy(ish). Like, suddenly dropping your credit limit below your current balance (and immediately hitting you with over-limit charges) for instance. I wouldn't put something like an up-front charge past them.
posted by Thorzdad at 9:17 AM on February 5