Zero % Period on Purchase

est1984

What does this mean?



Does this mean that say for instance I bought a camera for £500. If I pay this back within the 18 months I get no interest. If I go over (19 months without paying back the full amount) then I will have to pay the 18% APR.

What if I for instance bought a Camera for £500 in month 1. In month 2 I bought a TV for £500. In month 3 I bought a PC for £500. Does this mean that for the Camera which I purchased in the first month of having the card, I have 18 months from that period. As I bought the TV in month 2, does the 18 months apply from the point of purchase, and so on for the third purchase?

What does the 9 months 0% mean with a 3% fee?

YorkshireBoy

The 0% promotion runs for 18 months from account opening date.


The 9 months/3% fee relates to any balances transferred from other cards to this one.

Fingerbobs

And just to be clear, any purchases you make within the first 18 months from account opening will attract zero interest until the end of the 18 months. You will, however, need to make at least the minimum repayment each month, and you must repay the balance in full before the 18 months is up to avoid paying any interest.

est1984

So say if I had if the 0% promotion had expired and I purchased something with my card for £500. How does the interest rate get calculated for that month? I may want to pay it off that next month.

Is it 500 * 18.9%? Or is it 500 * 18.9%, that amount divide by 12.

I don't have a credit card, and I messed up badly as a 17 / 18 year old with credit cards, so I learned the hard way. I have a good credit rating now, I really don't want to mess it up again ever.

[Deleted User]

The 18.9% is an APR. So you would pay the monthly equivalent of that - a little less than 1/12 (due to compunding).

est1984

What do you mean by compounding.

Do you mean depending at the point of where you are in the year. For instance if I am in April, I will be owing the £500 * 18.9%, that sum divided by 8 (remaining months in the calendar year) on top of the £500 (cost of purchase).

Is it correct to assume that once a promotion has ended people normally snap the card up and opt for another.

YorkshireBoy

18.9% is the APR. Your T&Cs (and possibly your statement too) will show the monthly rate equivalent to this...it's 1.4531% (although it may be rounded down).


Any interest bearing balance will accrue DAILY interest as follows...


Balance x 1.4531% x 12 / 365


So if you have a balance of £500 it will accrue interest at 24p per day.


EDIT: As to "what is compounding?", it's simply interest on interest, ie they apply interest to your account at statement date...and then charge interest on this interest. This is why the APR is not 12 x the monthly rate (it's near enough 13 x).


And yes, most financially savvy people will ditch and switch to get a better deal.