Echidna please bear in mind that depending on your APR it is perfectly possible to pay the minimum amount FOREVER and NEVER pay back all you owe. If you cannot afford to clear the full amount, including interest accrued, within the time it would have taken you to save for the item, then you will be getting into financial hot water right away.

My APR is 16.9% and my minumum payment is 2.5% or 5GBP, whichever is more at the time of the issuing of the statement. I have a maximum 56 day period of onterest free (that's the day after a bill is issued until the day payment for the next billing period is due).

(Using a $ now because the GBP comes out as a question mark, and rounding up and down so i might be out by a cent or two here...)

Month 1: I have borrowed $500, and i pay my minimum payment which is $12.50.

Month 2: My statement would be $500-$12.50+interest (my APR works out as 1.31% monthly) which is $493.88. My minimum payment would then be $12.35.

Month 3: Once i paid that i would owe $493.88-$12.35+interest, which is $487.83. My minimum payment is $12.19.

Month 4: My statement is $487.83-$12.19+interest which is $481.36. My minimum payment is $12.03.

Month 5: My statement is $481.36-$12.03+interest which is $475.48. My minimum payment is $11.88.

Month 6: My statement is $475.48-$11.88+interest which is $467.67. My minimum payment is $11.74.

Once i pay that $11.74 my new balance will be $461.90.

So after 6 months paying the minimum payment i have paid $72.69, but i've only actually reduced the original debt of $500 by $38.10. Meaning i have paid almost as much, $34.59, JUST to have the item 6 months ago, an item i have not yet paid 10% of the cost of.

Only paying the minimum payment it would approximately (can't be bothered going through every single sum...) 80 months to repay $500 and in that time you'd pay about $325 just in interest. Is your $500 item worth $825 and 6 and a half years of debt?

Paying back $1000 in the same way would take 12 years and cost about $980 in interest.

If you plan to get a card, it's best to figure out the REAL cost of the item you need, then work out how much it will cost to actually buy it on a CC using the above maths, taking into account how much your APR is, what the monthly rate translates to (the bank can usuallt tell you this) and how much you can really afford to pay back onto the card each month. The "minimum payment" is sold as a means of making debt affordable, but really it's just financial quicksand for the unwary. Every time you make the minimum payment while interest accrues the handcuffs the CC company has on you tighten.

I'm not saying don't do it, just think VERY carefully about it, PLAN what you will spend, PREDICT what you will actually have to pay and BUDGET to always pay the amount you have decided on to keep to that final amount. Calculate what it will cost BEFORE you spend any money and go into it with your eyes wide open. Best of luck.

Bx

ETA - how depressing. After all my number crunching with a mobile phone calcultor and writing all over the back of the gas bill envelope, here is a website which will do it for you - tell it how much you want to borrow, the interest rate of your card, how the minimum payment is calculated and how much you can afford to pay each month and it will tell you how long it's going to take you to pay and how much it will cost you in interest. It doesn't do partial rates (couldn't do my 16.9%, only 16% or 17%) so round UP to make sure you don't underestimate.