Good UK credit card tips & advice can save you a lot of money.

As mentioned in the previous section, the customer has the option of paying off part or all of the monthly credit card bill.

It is worth considering the implications of these two options further. If the customer pays the bill in its entirety by the first date, they will receive interest free credit for a minimum of 30 days (or a maximum of 60 days for credits made early in the billing period).

If they pay less than the total bill by the first date, they will be within the terms and conditions of the account but will be charged interest on the entire balance at the statement date for the entire period (that is the entire balance for the entire period, not the balance less your payment up to the date you pay the bill).

Any interest they are charged will be added to the statement for the next period, and this interest itself will become subject to a further interest charge along with other purchases, if the bill is not paid off in full. This is known as compound interest. A typical rate of interest on a credit card vairys from 10%-30% pa.

To retain this credit facility, it is important that the customer pays at least your minimum payment on time every month.

Failure to do so will result in charges (in the region of £20-£30 per digression) as well as the interest, which of course will become subject to interest in furure periods. The credit card company or bank will also registed the late payment to their internal files and their external credit reference company, which will adversly impact on your credit rating making it harder to get credit in future. Ultimately, they may withdraw the credit facility and sue you for the outstsnding amount and fees incured in doing so.