further information about 0% credit card

Cpu2007

Hello everyone

I came across interest free cc that allow you to make purchases and if give you a period of time interest free, so if you pay within that time then you don't pay any interest.

So lets say I get the tesco card with 18 moth 0% free,

I make a purchase of 10,000£

if I pay £100 every month for 17 months and then in the last month I pay £8300, this will mean that I don't have to pay anything extra right? and all I will have spent will be £10,000?

YorkshireBoy

Yes........

bengal-stripe

The likelihood of getting a limit of 10k on a 0% promotional CC is pretty remote (unless you're a multi-millionaire) .

Cpu2007

Thank you bengal for pointing that out
so what would be the best way to get that amount with 0% ? apply for multiple accounts ? I read in the article that having multiple cards can affect credit score

YorkshireBoy

Whether you have one card or 4 cards, you'll still have £10K of debt.


Some lenders may mark you down for having 4 cards. Others won't care about the make up...just the bottom line figure (of £10K).

Cpu2007

yeah but this debt will be paid back so doesn't that count for something?

The reason why I want to know about this is because I wanted to know the outcome of the following situation,which to me sounds like a win win.
Lets use the following scenario.
Lets say I have £10k in my saving account.
I also have an income.
instead of using 10k to make a purchase,I leave it in the saving account and keep earning interests.
I use a (or multiple) cc to make a 10k purchase and keep paying back everything monthly from the income and at the end of the 18 month period use some of the saving account money to pay the remaining cost of cc.

what will be the downside of doing this(a part the obvious ones,like missing payments,if it happens )

CLAPTON

Cpu2007 wrote: »

yeah but this debt will be paid back so doesn't that count for something?

The reason why I want to know about this is because I wanted to know the outcome of the following situation,which to me sounds like a win win.
Lets use the following scenario.
Lets say I have £10k in my saving account.
I also have an income.
instead of using 10k to make a purchase,I leave it in the saving account and keep earning interests.
I use a (or multiple) cc to make a 10k purchase and keep paying back everything monthly from the income and at the end of the 18 month period use some of the saving account money to pay the remaining cost of cc.

what will be the downside of doing this(a part the obvious ones,like missing payments,if it happens )

there's no reason why you shouldn't do this and when interest rates were higher a lot of people did, indeed do this.

depending upon your income and credit files you may not get the credit limits you want : multiple applications are recorded on credit files although drop off after 6 month.


obviously the total debt in relation to earning may affect any future credit applications
best to pay more than the minimum each month and don't max out the cards as this looks bad.

bengal-stripe

Cpu2007 wrote: »

yeah but this debt will be paid back so doesn't that count for something?

But that will be at some point in the future and a lot of things can happen between now and then.

Fruit_and_Nut_Case

Cpu2007 wrote: »

if I pay £100 every month for 17 months and then in the last month I pay £8300, this will mean that I don't have to pay anything extra right? and all I will have spent will be £10,000?

Provided that £100 is sufficient to cover Tesco's minimum payment requirement.

Cycrow

Cpu2007 wrote: »

yeah but this debt will be paid back so doesn't that count for something?

why would it could for anything ?
all debt is supposed to be paid back. If the lender didn't think you will pay it back, they wouldn't lend to you in the first place

Thats what the risk assessment is for.

generally with credit applications, the amount of savings doesn't come into it, so its irrelevant how much you have saved. Besides, even when you have the money saved, theres no guarantee that you will use it to pay of the debt, you could have 10k savings, then get 10k credit, then go out and spend both.

There is nothing wrong with putting stuff on a 0% credit card while you have the savings available to cover it. But it wont make a difference as far as the lender goes.

you need to compare your current credit limits with your salary to get an idea of home much you might be able to get.
As a rough guide:
potential credit limit = (Salary / 2) - existing credit
To get high limits on a single card, you either need to be earning alot of money, or have had the card for awhile where they will increase your limit.

Cpu2007

@cycrow your going out of topic. I'm not interested in what if this happens, what if that happens and what if I spend everything or they don't give me that credit limit.
My question is simple curiosity and is about the scenario I've described in the previous post.
I don't want to know whether they will consider my savings or if I have a property; that's another story.

I am asking about the possible downsides if in this hypothetical scenario I get a 10k limit, I use it instead of my savings and then I pay out at the end everything.

Can this cause any downsides? can it affect my credit score negatively even if I pay everything in full and pay all my debts back?