Newbie: 0% Purchases Card, question

azza21

Hi guys i'm kind of new to the Credit card world, i have read martins 0% purchase card article, however i'm still not 100% sure on a few things.

I'm thinking about applying for a the Tesco 0% 12months card, now the question i have is as follows.
Say for example i got the credit card and purchased a new TV costing £2k and spent another £1k on other items maxing out my card, then never spent anymore, could i setup a monthly payment of £250 to pay off the debt on the card....

If i paid of the £3k within them 12 months at 0%, would i need to pay any interested or would there be no other payments other then what i paid off...? Obviously if i went over them 12 months i'd have to cover the 16.9% interest...

The other bit is the interest free for 51 days, if i'm paying it off at 250 a month and its 0% on purchases there shouldn't be any interest should there as i have 12 months to pay it off at 0%...which i would have done...?

hehe sorry to come across a bit slow, i'm just new to it all and would rather seek help before delving into something i do not properly understand.

Regards

Aaron

Moggles_2

Yes, provided that you meet the minimum monthly payments (3% of your outstanding balance) and keep within the Ts & Cs, there are no charges for 12 months. Any remaining balance after 12 months would be charged at your standard rate, currently 16.9% APR.

The other bit is the interest-free for 51 days. If i'm paying it off at 250 a month and its 0% on purchases, there shouldn't be any interest should there as i have 12 months to pay it off at 0%...which i would have done...?

That's right. The interest-free 51 day period only comes into play when your 0% promotion expires

TrickyDicky

azza21 wrote: »

Hi guys i'm kind of new to the Credit card world, i have read martins 0% purchase card article, however i'm still not 100% sure on a few things.

Lets try and clear them up

I'm thinking about applying for a the Tesco 0% 12months card, now the question i have is as follows.
Say for example i got the credit card and purchased a new TV costing £2k and spent another £1k on other items maxing out my card, then never spent anymore, could i setup a monthly payment of £250 to pay off the debt on the card....

Yes. You need to pay the minimum (which is usually about 2%) and so it may actually be better to pay the minimum (about £60/month at 2%) and put the rest in a savings account. Then, at the end of the 0% term, pay the balance off. This way you actually make some interest on the stuff you buy.

If i paid of the £3k within them 12 months at 0%, would i need to pay any interested or would there be no other payments other then what i paid off...? Obviously if i went over them 12 months i'd have to cover the 16.9% interest...

If its all paid off inside 12 months, then you pay no interest. any remaining balance would be charged at 16.9%. But be careful - if you miss a single payment, you will be charged interested, and this will be back dated to when you purchased the items. So if you forget month 11's payment, you will pay 11 months at 16.9% worth of interest.

The other bit is the interest free for 51 days, if i'm paying it off at 250 a month and its 0% on purchases there shouldn't be any interest should there as i have 12 months to pay it off at 0%...which i would have done...?

This relates more to the period outside the 12 months. Inside the 12 months, you pay no interest as long as you pay at least the minimum payment and pay it on time (set up a direct debit so you never forget ) but when the period ends you have 51 days from date of purchase to pay off the balance without paying interest. In reality, just watch your statements - they give you a "due date" and aslong as you pay off the balance before then you dont pay any interest. Again, the best action is to set up a DD for the entire balance each month, and you never pay a penny of interest, and you can forget about it.

hehe sorry to come across a bit slow, i'm just new to it all and would rather seek help before delving into something i do not properly understand.

Regards

Aaron

Dont worry - we all have to start somewhere

Richard

exel1966

azza21 wrote: »

Hi guys i'm kind of new to the Credit card world, i have read martins 0% purchase card article, however i'm still not 100% sure on a few things.

I'm thinking about applying for a the Tesco 0% 12months card, now the question i have is as follows.
Say for example i got the credit card and purchased a new TV costing £2k and spent another £1k on other items maxing out my card, then never spent anymore, could i setup a monthly payment of £250 to pay off the debt on the card....

If i paid of the £3k within them 12 months at 0%, would i need to pay any interested or would there be no other payments other then what i paid off...? Obviously if i went over them 12 months i'd have to cover the 16.9% interest...

The other bit is the interest free for 51 days, if i'm paying it off at 250 a month and its 0% on purchases there shouldn't be any interest should there as i have 12 months to pay it off at 0%...which i would have done...?

hehe sorry to come across a bit slow, i'm just new to it all and would rather seek help before delving into something i do not properly understand.

Regards

Aaron

£2K on a TV !!!!!

Being so new to the world of credit cards I wonder whether you have experience of any kind of finance whatsoever ?

It will have a great deal of rellevance considering your aspirations.

azza21

Big Thanks You, Moggles and TrickyDicky for superb breakdown on what i need to know.

exel1966 wrote: »

£2K on a TV !!!!!
Being so new to the world of credit cards I wonder whether you have experience of any kind of finance whatsoever ?

It will have a great deal of rellevance considering your aspirations.

Now exel1966 thanks for you input too and the answer to your question, not a whole lot of experience hence me coming on this very website. However if you read my sentence properly the little bit where i said "for example" and then follow up with a new TV for £2k would give you an idea that i was just using the TV as an example for my question

exel1966

azza21 wrote: »

Now exel1966 thanks for you input too and the answer to your question, not a whole lot of experience hence me coming on this very website. However if you read my sentence properly the little bit where i said "for example" and then follow up with a new TV for £2k would give you an idea that i was just using the TV as an example for my question

You inferred you'd need a credit limit of £3K plus as you mentioned it, whether it be for a TV or anything else.
I'm quite aware it was a example and you'd probably need your head tuned in to reality to buy a TV for £2K, but each to their own.

However, as someone with little exeperience of having any finance or credit cards you're unlikely to have any form of credit history meaning you've basically got no chance of obtaining a card with limits you were inferring, but should perhaps think more realistically.

azza21

exel1966 wrote: »

You inferred you'd need a credit limit of £3K plus as you mentioned it, whether it be for a TV or anything else.
I'm quite aware it was a example and you'd probably need your head tuned in to reality to buy a TV for £2K, but each to their own.

However, as someone with little exeperience of having any finance or credit cards you're unlikely to have any form of credit history meaning you've basically got no chance of obtaining a card with limits you were inferring, but should perhaps think more realistically.

The reason i chose £3000 as a credit limit was because i read that; that was the limit Tesco gave you at first with an option to increase it if they feel so, or something along them lines. There was no other purpose behind the £3k i used in my example other then it being related to the card in question i'm considering applying for.

geewhiz

azza21 wrote: »

The reason i chose £3000 as a credit limit was because i read that; that was the limit Tesco gave you at first with an option to increase it if they feel so, or something along them lines. There was no other purpose behind the £3k i used in my example other then it being related to the card in question i'm considering applying for.

I applied a couple of weeks ago and was very impressed with their application process.

I completed the online application, was immediately accepted and offered a £6000 credit limit, the pin arrived in 3 days, the card came 2 days later and I spent £4000 on it within 3 hrs of activating it, all without having to speak to anyone !

YorkshireBoy

azza21 wrote: »

The reason i chose £3000 as a credit limit was because i read that; that was the limit Tesco gave you at first with an option to increase it if they feel so, or something along them lines.

If you did read that, then ignore it because it's not true!

I have an excellent credit history, built up over many years (6 years worth showing on my CRA files), and they gave me £2,450.

Granted, I had significant available credit at the time (50% of which was being stoozed), but if someone with my impeccable history gets such a low limit then you, as a credit card newcomer, shouldn't build your hopes up for £3K at the outset.

td_007

azza21 wrote: »

The reason i chose £3000 as a credit limit was because i read that; that was the limit Tesco gave you at first with an option to increase it if they feel so, or something along them lines. There was no other purpose behind the £3k i used in my example other then it being related to the card in question i'm considering applying for.

Another thing to bear in mind that the 0% deals are usually reserved for those with "good credit history". So it not just a question of credit limit but if you will get that offer in the first place. Sorry to put a damper on your line of thinking but if you do get the card take advantage of the knowledge of folks on this site to get the max out of it.

sparky2010

Just took out the Tesco card and was approved there and then for just over 4000. shame really as i need to make a purchase of 6000 which id love to spread out over a year! now, how many clubcard points would that be....