Interest free period.

carter2904

Hey guys,
im thinking about getting a credit card with 0% on purchases to help me buy a car. I've never had a credit card before but have a good credit rating as i pay numerous things by direct debit and have never missed a payment, i also have an overdraft and have done for some time.
Am I right in thinking that if i get 0% for 12 months (for example) and spend £3000 as soon as i get the card, that i wont pay any interest until that 12 month period is up if i pay, say £150 a month off the balance? or am i just being very niave?!?!

Muchos gracias for your help in advance . . .

stephane_2

If you've never had any credit card before then I doubt very much that anyone will give you one with a 0% offer.
Paying by direct debit don't play any part of your credit score for a lender....having an overdraft neither especially if you use it regularly, to the contrary that would go against you.
Best thing would be to try your own bank first and see if they can offer you a credit card with a decent rate...

redpete

But you have understood the concept. You will have to pay the minimum monthly amount that the lender asks for (maybe 5% of the balance, about £150) and you will pay no interest until the end of the offer period.

opinions4u

carter2904 wrote: »

im thinking about getting a credit card with 0% on purchases to help me buy a car. I've never had a credit card before but have a good credit rating as i pay numerous things by direct debit and have never missed a payment, i also have an overdraft and have done for some time.

1. Your own bank is probably the most likely to provide you with a credit card.
2. They may not have a 0% on purchases deal availabile.
3. A car dealer will usually charge a fee for accepting a credit card in payment - typically around 2.5% of the sum involved.

Am I right in thinking that if i get 0% for 12 months (for example) and spend £3000 as soon as i get the card, that i wont pay any interest until that 12 month period is up if i pay, say £150 a month off the balance? or am i just being very niave?!?!

4. You have understood the concept.
5. You are in now way guaranteed a £3,000 limit.
6. The rate after introductory offer period is variable, and you will find many horrified posters on this forum stating "they're charging me xx% it's outrageous. So be prepared for a shock afterwards.
7. Even if you do get a 0% deal, a 12 month offer period is not automatic.

There are risks and pitfalls to the plan. Why not save up £150 a month for 20 months and then buy the car?

carter2904

Cheers guys, at least i won't get a massive shock when i go to the bank on Saturday!

RE: saving up £150 for 20 months. I work 25 miles from home and can't get to work easily without a car. My current car has been written off after a motorway accident on Monday morning, so a replacement is needed ASAP!

If the credit card plan doesn't come together then there's a plan B and C (possibly even a D if i get my calculator out!) to fall back on, but they're not quite as cost effective!!

Thanks again, I know what to expect now, and its nice to know i got the concept right (I thought about it too much and had all these technicalities in my head!)

danothy

stephane wrote: »

If you've never had any credit card before then I doubt very much that anyone will give you one with a 0% offer.

Not to be belligerent, but my first credit card was a Tesco Clubard credit card with a 0% deal and very little history... although they did give me the lowest possible credit limit (£250) and it's set for a high APR after the 0% period it is up, so a more generalised version of your point still stands.

papalimabravo

carter2904 wrote: »

My current car has been written off after a motorway accident on Monday morning, so a replacement is needed ASAP!

Christ!

Everyone got out OK hopefully?