first time CC owner - tesco CC

crazypearce

So I just applied and got accepted for a Tesco purchase CC with 0% interest for 16 months. When I was reading through the information I saw a line saying that if you pay the balance off in full before the repayment date, that you get 0% interest.

Does that mean I can buy something a week before payday then pay the full balance off when I get paid and be charged no interest even after the 16 months 0%? that seems a little too generous and had me a little confused.

cheers in advance!

redpete

It sounds like the way most credit cards work. If you pay off the full statement balance by the monthly payment date every month then you don't pay any interest on purchases.

BTW - make sure you pay the minimum mopnthly payment amount during your 16 month period - otherwise you will get charged and the 0% promotion will be removed.

crazypearce

yeah, I only plan to use it as an emergency if I'm running out of cash near payday and need to buy something. I will always pay the full balance when I get paid. It's easier and cheaper than running to wonga.com and paying their ridiculous fees!

grumbler

crazypearce wrote: »

Does that mean I can buy something a week before payday then pay the full balance off when I get paid and be charged no interest even after the 16 months 0%? that seems a little too generous and had me a little confused.

Yes, this is how all CCs work. In fact after the statement is produced you have about 25 days to pay the balance, i.e. much more than a week. Depending on when the purchase is made during the billing month you have up to 55ish days to pay it back without paying any interest.

B19JON

Why not spend everything you can on the card, claim your tesco clubcard points and then pay back in full every month?
You have 16 months of 0% interest... might as well utilize this. Just don't spend more then you can afford.

zerog

0% for 16 months means that if you pay the minimum payment for 16 months, you will not be charged any interest. Just before 16 months, pay off the full balance and you won't have paid a penny in interest.

You could also pay off the full balance each month, but why would you do this if you didn't need to? (Possible reasons might be - you're tempted to spend all your savings, you don't want your credit report to look like you're using up all your available credit)

crazypearce

thanks a lot guys. it seems a lot more reasonable that I ever thought. kinda kicking myself that I never bothered with it before - it would have made life a lot easier!

dottodot

Yes, I've recently opened up a Tesco CC too - have set up a direct debit to pay the balance in full each month (strongly recommend doing this, its so easy to forget and then find yourself with charges) and am using it instead of my debit card so that I benefit from the Tesco clubcard points. Bit scared though because rather than money gradually disappearing from my bank account over the month I'll find myself with one large debit!

Gromitt

crazypearce wrote: »

thanks a lot guys. it seems a lot more reasonable that I ever thought. kinda kicking myself that I never bothered with it before - it would have made life a lot easier!

Pay for everything you can with the CC, and at the end of the month, put the money in a savings account. Setup a DD for the minimum amount. After 14 months or so, withdraw the money from the savings account and pay off the card in full. You'll then basically have clubcard points and 2+% effective cashback (more if you can put it in credit earning current accounts)

dresdendave

crazypearce wrote: »

yeah, I only plan to use it as an emergency if I'm running out of cash near payday and need to buy something. I will always pay the full balance when I get paid. It's easier and cheaper than running to wonga.com and paying their ridiculous fees!

Sensible use of a CC is certainly better than getting a PDL but if you are frequently running out of money before payday you should also review your spending habits to correct this.