Tesco Credit Card 0% Question

Kie2009

Hi all, I am on the car hunt and wanting to borrow around £3000 in order to purchase one. As I am wanting to pay this amount off within a 1 year period I was thinking of trying to get a 0% credit card in order to do so. According to this site the Tesco cc is the best bet with 12 months interest free. However I am quite new to this and although I have used a credit card issued by my bank for years I have never had to apply for one. Could someone please clear up the following for me taken from the tesco cc summary?

Interest Free Period

• Maximum 51 days for purchases if you pay your balance in full and on time, and have paid the previous month’s balance in full and on time.

Interest Charging Information

You will not pay interest on new purchases if you pay your balance in full and on time. Otherwise, the period overwhich interest is charged is as follows:



If the account is not fully cleared, interest will be charged on the average daily balance until full payment is made and credited to your account. Therefore, the longer you take to make a payment, the more interest will be charged.
¹ If you pay the balance in full, any interest charge for the period from the previous statement to the date of full repayment will be debited the following month

Does this mean I will be charged interest on the £3000 monthly for not paying the 'full balance' or can I simply make the minimum payments and avoid any interest? Also does my plan seem sound or need some reconsidering?
Thanks for your help, Kie.






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Moggles_2

Can I simply make the minimum payments and avoid any interest?

Yes. Provided that you meet the minimum monthly payments required and always pay on time, there's no charge for the first 12 months.

Might be an idea to set up a direct debit to pay the minimum monthly amount. That way,
it's Tesco's responsibility, not yours, to make sure the monthly repayments get there on time

Moggles_2

Also does my plan seem sound or need some reconsidering?

Just be aware that some dealers in the motor trade do not accept credit cards or charge a premium for their use.

Kie2009

Thanks for the quick responses was just a little confused about the wording of the summary.
Ah ok so I could end up paying 3% straight away in card premium charges??

Moggles_2

Kie2009 wrote: »

Thanks for the quick responses was just a little confused about the wording of the summary. Ah ok, so I could end up paying 3% straight away in card premium charges?

That's a possibility, certainly.

Kie2009

Any ideas as to an alternative? Would a loan be a better idea in your opinion?

YorkshireBoy

Kie2009 wrote: »

Any ideas as to an alternative?

Paying by 0% purchase card, followed by an annual 0% balance transfer to another card is by far the cheapest option, provided...

1) The dealer accepts credit cards (private purchase requires a different approach), and

2) 0% balance transfer cards are still available in 12 months time.

Would a loan be a better idea in your opinion?

You're not going to find a loan for less than 3% APR, which will be the cost of financing your car purchase by credit card.

udydudy

and btw you can always negotiate with the dealer not to charge the 3%(or any charge for credit card purchase).

I would expect any dealer today is looking to offload his inventory rather than haggle about a 3% charge!!! especially if that is a deal breaker. looking at the fact that if you are buying a new car then 30th Sep is the last date for the govt. scrappage scheme. After that the dealers are back to square one!!

Discounts back again... remember whatever the government may say the recession is not yet over.. in fact it just started a few months back!!!

Unless the government wants to throw a few more borrowed billions at the industries!!!

Ritchie74

udydudy wrote: »

and btw you can always negotiate with the dealer not to charge the 3%(or any charge for credit card purchase).

I would expect any dealer today is looking to offload his inventory rather than haggle about a 3% charge!!! especially if that is a deal breaker. looking at the fact that if you are buying a new car then 30th Sep is the last date for the govt. scrappage scheme. After that the dealers are back to square one!!

Discounts back again... remember whatever the government may say the recession is not yet over.. in fact it just started a few months back!!!

Unless the government wants to throw a few more borrowed billions at the industries!!!

My mate got a new Micra under the scrappage scheme and they wouln't budge at all on the 3% fee- best they would do is offer gap insurance at cost minus the 3% CC fee. She got it for just £6,500 on the road so guess their profit margin was squeezed so start with. Could be different again with 2nd hand motors.
3% of £3,000 is £90- much less than you would pay on a bank\car loan. If you opt for car finance beware the rate they tell you is often not the actual APR as far as I am aware.
As already advised see if you can get them to knock it off.