Using 0% Interest Credit Cards

smiles2007

Hi there,

Just a quick query. I personally have very good credit rating. I am in a situation where i do have to spend out on a few neccessary things - i do have the means of paying for this but would have to spread this over 12 months. I was looking to borrow around £3000.00. I was thinking of applying for a credit card or two, specifically those with 0% interest free for 12 months. After this i was then going to cut the cards up and never use them and close the accounts. I don't intend to make a habit of this after however do need a way of making my cash flow easier for the next 12 months. Is this a good idea? or would i end up damaging my credit rating - does this have an effect if i decide a couple of years down the line to do the same. The whole point of doing this was just to spread out my costs monthly - I am in a position to pay 12 monthly installments to the full amount - just avoiding the interest really. I have done something similar by taking out a Halifax Clarity credit card purely for the advantage of when i go on holidays i can get free withdrawals from ATMs abroad.

Any advice and tips much appreciated at your earliest convenience

Kind Regards

smiles2007

I gather no one has an answer - any thoughts anyone?
Kind Regards

Mrs_Jojo

Sounds like a good plan to me, as long as you cut the cards up once you have spent what you need to - depends how disciplined you are!

smiles2007

Thanks for taking he time to reply JoJo.

I would say i am very disciplined and would cut the cards up. I will hopefully trying to purchase things for the first 12 months on credit ( essential things are needed, Car.....thinking of proposing hence engagement ring ). Unfortuantely do not have the money in hand now but my job is very secure and i can start paying towards these immediately ( and would pay the full amount off in the 0% credit agreement period). Its just a case of relaxing my cash flow at the moment. I wasn't too sure how the credit card companys would look at this when i possibly further apply in the future - there would be an obvious pattern that ' this person is getting 0% deals out and is very disciplined in repayments - we can't really make much money from him with interest'. I am just trying to put myself in the shoes of the lenders. Just dont want to get too trigger happy and find that i shoot myself in the foot in the future - trying to be one step ahead of these lenders.

kind regards

CLAPTON

smiles2007 wrote: »

Thanks for taking he time to reply JoJo.

I would say i am very disciplined and would cut the cards up. I will hopefully trying to purchase things for the first 12 months on credit ( essential things are needed, Car.....thinking of proposing hence engagement ring ). Unfortuantely do not have the money in hand now but my job is very secure and i can start paying towards these immediately ( and would pay the full amount off in the 0% credit agreement period). Its just a case of relaxing my cash flow at the moment. I wasn't too sure how the credit card companys would look at this when i possibly further apply in the future - there would be an obvious pattern that ' this person is getting 0% deals out and is very disciplined in repayments - we can't really make much money from him with interest'. I am just trying to put myself in the shoes of the lenders. Just dont want to get too trigger happy and find that i shoot myself in the foot in the future - trying to be one step ahead of these lenders.

kind regards

surely in the future you will save up for things you need rather than relying on credit cards

smiles2007

Clapton - the stupid mistake i made in life was stretch myself too far with buying my house - i maximised it. Stuck in a bit of a rutt now as majority of my wage goes on the mortgage and selling the house would leave me in negative equity - afraid a bit of resentment building up. I am not keen on getting loans - anything to avoid paying more interest. I can do without these things however it is becoming a nuisance - for example its getting to a stage now my 7 yr old car ( despite being reliable) is needing lots and lots of repairs - the cost is mounting up. I am in a very secure job and the income is good - however i would really love to treat myself to a new car ( well im looking at 2 yr old used cars to save a few thousand and nothing too fancy - i thought a golf which is standard and reliable car for the next 7 yrs). I am able to pay for this car in cash ( however it is most of my savings) but i dont want to part with all the money straight away in one go( incase of an emergency - just trying to be sensible) therefore i thought a good idea would be to look at 0% credit cards for 12 months just to help me spread the cost over a short period. I know it sounds complicated however i probably jsut worry myself silly at times - haha

McKneff

I have just done this to make a payment for £2K over the year.

Cant remember who suggested it but I was advised to make the payments over 11 months, just in case, which I will do.

fozmcfc

Nothing wrong in getting credit cards and using them in that way, particularly if they offer cashback or points such as clubcard points that you will use.

Just make sure you always pay at least the minimum repayment each month, or you will lose the 0%. So for instance you can't spend say £2000 in month 1 and pay nothing until month 8 or 9, you need to pay the minimum each month, but the balance won't have an interest added until the 0% period runs out.

Make sure that you know the exact date interest will start to be added.

With my Virgin card it is by my statement date. I currently am using a repeat offer which runs out on my June statement date which is the 10th. I aim to pay it off early June at the latest, but probably before the end of May.

I got my Tesco card last year solely for the 12 months interest free period and paid for a holiday and new computer with it in the early months and paid it off within the 12 months, so no interest and received clubcard points as well.

YorkshireBoy

smiles2007 wrote: »

I am able to pay for this car in cash ( however it is most of my savings) but i dont want to part with all the money straight away in one go( incase of an emergency - just trying to be sensible)

The dealer will likely make a 3% charge for paying by credit card. Are your savings making more than 3% net of tax?

Why not use your savings for the car and engagement ring and keep the credit card for so-called "emergencies"?

smiles2007

Fantastic tips - really appreciate everyones input - i dont know why, but when i discuss this with others it becomes clearer - thanks to all