Interest Free Period Query

adrockg

Hi all,

I have a credit card with an interest free period of 20 months, which in my naivety
I think means i can buy something and as long as i pay the minimum payment they
wont charge me any interest on that purchase until that 20 months is up.

However reading the summary box it would appear that each individual purchase only has a interest free period of 56 days.

As a new user i am not allowed to post a link so heres what it says in the interest free period of the summary box:

INTEREST FREE PERIOD: MAXIMUM 56 DAYS FOR PURCHASES IF YOU PAY THE FULL BALANCE ON THE PREVIOUS AND CURRENT STATEMENT ON TIME.
NO INTEREST FREE PERIOD ON CASH WITHDRAWLS OR BALANCE TRANSFERS.

INTEREST CHARGING INFORMATION: YOU WILL NOT PAY INTEREST ON NEW PURCHASES IF YOU PAY THE BALANCE ON YOUR PREVIOUS AND CURRENT STATEMENT ON TIME. OTHERWISE THE INTEREST IS CHARGED AS FOLLOWS,

PURCHASES, BALANCE TRANSFERS AND CASH WITHDRAWLS: INTEREST IS CHARGED FOM THE DATE THE AMOUNT IS DEBITED.

Can anyone confirm that I can purchase something and then cover the minimum payments or am I right in thinking I would only have 56 days to pay for a specific item?

Thanks in advance for any advice.

[Deleted User]

You have 20 months and can just make min payments.

If you don't clear in full each month, you are always charged interest, which in your case, is at 0%.

Ben8282

What is the 20 month 0% period for? If it is for purchases then you will not pay interest on purchases for 20 months. If it is for something else, such as balance transfers, then you will pay interest on purchases.
You need to find out what the 20 month interest free period is for.

pcc2304

If your card is 0% for 20 months on PURCHASES then you will pay no interest for 20 months. The 56 days interest free period is for when your promotional interest rate expires and you revert to your standard interest rate. Provided your card has the promotional rate for purchases you only need pay the minimum payment. Be warned though miss a payment, pay less than the minimum payment or exceed your credit limit and you will lose your promotional rate and revert to your standard interest rate.

chattychappy

The way to think of it is this:

The summary box and the reference to "up to 56 days interest free on purchases" still applies. No interest (on purchases) is applied if you pay the balance in full each month. If you don't, then interest is applied at the prevailing rate.

The intro promo just means that the prevailing rate is 0% for the period of the offer. So if you don't pay the balance in full, then interest is applied - at 0%. So the result is, no interest.

If you run a balance and pay the balance 1 day after your promo expires, then you will only pay the standard rate interest for 1 day. But on the "56 day" thing, if you pay your full balance one day after the due date, then you will be charged interest from the date of transaction until when payment arrives (plus late charges if you paid nothing by the due date). This can seem quite harsh.

So to summarise: during the promo period, you only need to worry about paying minimums. You won't see any interest on the account. Once the promo expires, then understand that unless you pay the balance in full each month, you will get no interest free period at all.

Dobbibill

adrockg wrote: »

Hi all,

I have a credit card with an interest free period of 20 months, .

First thing you need to check is what the 'interest free period of 20 months' is for.

If it's for purchases then go ahead and spend, if it's for a Balance Transfer then the 'up to 56 days interest free' will apply to any purchases you make.

adrockg

Thank you.