0% card confusion

hlw1810

I'm a bit confused how it works. If I transfer a balance and it's 0% for 27 months, after that time is up, if I still owe the balance do they back calculate the 27 months interest at the full APR of 18.9% and add it to the balance?

Or is it just at that point that they being to calculate the monthly interest and add it to whatever balance is left?

Sorry if it's a stupid question!

[Deleted User]

They start applying interest from that point on.

fozmcfc

As per ZX81 answer for your question.

But don't forget you can always get another 0% card a month or two before the 0% on the 27 months is running out and transfer the balance to that.

You can keep doing this until either everything is paid off, or you get refused a new 0% card.

The only time it's not worth doing that, is if the balance transfer fee is going to be larger than the interest by the time you pay it off.

For example if say you had £1000 left to pay off and you could clear it by the end of the 28 month, it is highly likely to cost you less interest than the balance transfer fee would to another card.

Finally whatever you do, don't make purchases on the card, it is always advisable to never mix purchases which aren't at 0% with a balance transfer that is.

thenudeone

They only start charging interest from the end of the offer period

bengal-stripe

You must pay every month the minimum without fail and on time, otherwise the bank is likely to cancel the zero percent deal.

But even then, you would not be charged interest retrospectively.

InsideInsurance

hlw1810 wrote: »

Sorry if it's a stupid question!

Its not a stupid query, it is a true interest free period with credit cards where interest is applied only at the point the period ends. It isnt like catalogue companies or certain stores 0% offers where you must clear it in time or the interest is back dated

hlw1810

InsideInsurance wrote: »

Its not a stupid query, it is a true interest free period with credit cards where interest is applied only at the point the period ends. It isnt like catalogue companies or certain stores 0% offers where you must clear it in time or the interest is back dated

Thankyou! And thankyou everyone else for your useful replies. That was what confused me - I have a catalogue account and made purchases on their buy now pay in 12 months offer and have made very sure that I will clear it by the deadline, or they add 39% interest from the entire 12 months....

geekonthepc

Just want to add a question to this - I've got 0% on purchases for 3 months on my HSBC card. When my interest free period runs out and they start charging interest - is this backdated to the original purchase date or just starts the day the interest free period ends? From what I'm reading I assume the latter, but it'd be nice to get confirmation.

Herbalus

geekonthepc wrote: »

When my interest free period runs out and they start charging interest - is this backdated to the original purchase date or just starts the day the interest free period ends? From what I'm reading I assume the latter, but it'd be nice to get confirmation.

Count yourself confirmed. Think about it this way: if a company offers 3 months interest free credit and you borrow for 4 months, they will charge you 1 months interest because 4 = 3 (free) + 1 (not free). If they didn't, it wouldn't be 3 months interest free.

geekonthepc

Thank you

sscott5581

geekonthepc wrote: »

Just want to add a question to this - I've got 0% on purchases for 3 months on my HSBC card. When my interest free period runs out and they start charging interest - is this backdated to the original purchase date or just starts the day the interest free period ends? From what I'm reading I assume the latter, but it'd be nice to get confirmation.

Interest is accrued daily from day interest free period ends on daily balance not original balance. If the statement balance is paid off in full by due date then no interest is charged.