Charge Card

[Dolby]

... am I right in saying it's the same as a cheque card and overdraft - BUT the 'overdraft' needs to be settled at the end of the month?

 

[mooks]

Yes! No!

I have no idea. But this thread seemed a bit lonely.

 

[Dolby]

LOL ... thanks for the reply

 

[mooks]

Here to help

 

[fastesthamster]

... am I right in saying it's the same as a cheque card and overdraft - BUT the 'overdraft' needs to be settled at the end of the month?

Kind of. You still get the "up to 55 days interest free" benefit, and it needs to be settled in full 25 days after statement date.

 

[Dolby]

Thanks.

I see they have what is referred to as a shadow limit, which means means a secret upper limit. Silly, really :/

 

[fastesthamster]

Thanks.

I see they have what is referred to as a shadow limit, which means means a secret upper limit. Silly, really :/

Well, yes. Theoretically there is no limit on a charge card. But you wouldn't be able to buy a 747 on your charge card, that would be ridiculous. There needs to be a limit linked to your affordability. This is the shadow limit. It's generally high enough that you wouldn't hit into it based on your salary etc.

 

[Dolby]

So a shadow limit could never be a full month salary - as you'd need to pay back at month end?
So typically 50% or less of a salary?

 

[fastesthamster]

So a shadow limit could never be a full month salary - as you'd need to pay back at month end?
So typically 50% or less of a salary?

No, it's assessed the same as affordability for a credit card. So your limit can be much greater than your salary. That's why it shouldn't be an issue, and you shouldn't hit your shadow limit. If you want to buy a car on your credit card, say, and the value is greater than your shadow limit you would need to notify the bank of the purchase beforehand, and they will grant a temporary limit increase.

 

[Dolby]

Thanks!

 

[TheShadow]

Are there any cards that have shadow limits anymore?
The only charge cards available in SA that I know of are Diners and AMEX.
I know with Diners you have a hard limit just like any other form of credit.

 

[Dolby]

I know with Diners you have a hard limit just like any other form of credit.

Diners are the ones that phoned me and told me about the shadow limit - I'd never heard about a shadow limit before