BNPL + Interest free CCs

bigtingz92

Hi all,
Quick question, There is an item that I would like to Buy now and pay for later. It is quite an expensive laptop, coming in at £1900. You can get a 12 month extension on payment and if you pay in full before the 12 months is up, no interest is charged, all you pay extra is a £29 admin charge, which is more than fair enough.

Now, I've heard of interest free Credit cards, such as the Halifax All-in-One, where you get 15 months interest free.

The question I have, is could I buy now, and in 11 months, pay using the Halifax All-in-One card and have another 15 months to get the money?

Any suggestions are appreciated, cheers!

Tixy

You'd need to find out from the seller/provider of the buy now pay later deal whether you will be able to pay off your balance with a credit card. You may not be able to.

I assume you appreciate that with interest free credit cards you do still need to make at least the minimum payment each month? You can't delay paying the whole balance until the end of the interest free period.

The longest 0% purchase cards on the market are 24months so you may be better off considering one of those (assuming that you'd be likely to pass the credit checks).

bigtingz92

aah, well I think that is where my plan falls apart. I guess I'll just go for it and make this a lesson in how to save, with dire consequences if I don't

Cheers, Tixy

Candyapple

bigtingz92 wrote: »

Hi all,
Quick question, There is an item that I would like to Buy now and pay for later. It is quite an expensive laptop, coming in at £1900. You can get a 12 month extension on payment and if you pay in full before the 12 months is up, no interest is charged, all you pay extra is a £29 admin charge, which is more than fair enough.

Now, I've heard of interest free Credit cards, such as the Halifax All-in-One, where you get 15 months interest free.

The question I have, is could I buy now, and in 11 months, pay using the Halifax All-in-One card and have another 15 months to get the money?

Any suggestions are appreciated, cheers!

No, as the offer runs from the date you open your card account eg so if you were accepted for the Halifax card in August 2015 , your 15 months would end Nov 2016. So even if in month 11 you paid off the balance using your Halifax card, the most time extended you would have at 0% would be 4 months. That's even assuming if the company allows payments to be made by credit card in the first instance.

Far better to take out a 0% purchases card and then pay for the item in one go and then make the minimum payments on the card until the end of the 0% period where you should clear it. That way you don't have to pay no £29 fee either

Lungboy

Far better to not get a £1900 laptop on credit but save for it instead

bigtingz92

Surely as long as it's payed off within the 12 months then there is no issue though, other than the added £29?

Tixy

If you decide to try and buy on a BNPL deal then a couple of things crop up often on these forums - don't expect the creditor to send you any reminder near to the end of the 12 months, and don't leave it until the last few days to pay off the debt.

There have been many cases on here where people have missed the payment date because they forgot, or they didn't realise how long the payment would take to process, or in one case they were unexpectedly in hospital and so couldn't make a payment.

There was another case where a person paid a few pound less than the outstanding balance and was surprised to be charged the whole previous year's interest as back interest (despite it being in the T&Cs of the agreement).

bigtingz92

Tixy wrote: »

There was another case where a person paid a few pound less than the outstanding balance and was surprised to be charged the whole previous year's interest as back interest (despite it being in the T&Cs of the agreement).

...OUCH!

I will definitely keep these things in mind, and I'll send them an e-mail to clarify all these things before I do anything. The scheme that they operate is that if you don't pay the full amount within a year, they ask you to start paying it off via 36 monthly repayments at 29.9 APR.

Thanks all for the info btw

Tixy

Yes the sting with these is if you are so much as a day late your debt would go up by £568 (being the 29.9% for a year on the £1900).

And if you end up paying over the 36 monthly payments the total cost would be £1866, so the laptop ends up costing effectively double the original price.

fozmcfc

Firstly, there is nothing wrong in what you want do, as long as you pay it off in time.

Where some people get caught out, is if it takes time to be approved for the finance.

For instance you go to purchase it on the 14th August 2015, the finance is approved on the 17th and you get the laptop on the 19th.

It is the day that the finance is applied for i.e. the 14th, that it will need to be paid off by, not the day it's approved or the day you get the laptop.

In addition, in the above example, I would be looking at making the payment no later than the 7th August 2016. Again if you were to even pay on the 14th, by the time it takes for the payment to be processed etc, will probably means it's cleared on the 15th or 16th and then it's still considered to be a late payment and the interest kicks in.

As I say, it isn't something that is a problem, if you take the above into consideration.

I would say however, that some credit cards offer longer 0% on purchase period than 12 months, but you need to make the minimum payment each month to them. But surely you would be looking at putting away £100 + each month to have the £1900 available by the end of the 12 months, so you didn't have to pay tons of interest, so the minimum payment shouldn't be a problem.

If you got it on a 0% credit card, you would avoid the initial £29 fee and it would give you the freedom to buy it from other places, which could well be cheaper.

Also at the end of the 0% credit card period, you could always apply for another 0% card and balance transfer the rest over for a small fee.

Your only issue with getting a card, could be your financial status, in which case normally these buy now pay later deals, don't usually require such as decent credit rating as a 0% credit card.

D_M_E

You also need to consider the fee (if any) the credit card will charge for making the transfer, anything from 0% to about 3% of the transfer made.