When do I pay interest on purchase?

jolester

Hi,

If I have a credit card which is 0% on balance transfers for 24 months and 0% interest on purchases for 3 months does this mean if I buy something on the card that I pay interest on the purchase after 3 months, or, anything that I buy in that 3 month period will be (and remain) 0%?

Thanks,

MallyGirl

Never mix purchases and BTs on a card unless the deals run for the same term.
After the 3 months 0% on purchases is up you will be hit for interest from the day of purchase, not from the statement date, as you will not be paying off in full every month (which is the condition you must meet to receive your 'up to 56 days interest free' normal CC operation.)

3 months is not worth even going there for the added complications. Leave it as a BT card only - lock the card away in a drawer and just pay the minimum payment by DD. Get a separate card for 0% if you want that as well/qualify for one.

jolester

Thanks Mallygirl,

I haven't spent on a CC for years but still transferring balances so always gone for the best BT card.... til I got hit with a huge dentist bill today which I'd have put on CC if it didn't load me with interest... but thanks to your advice I'll not do this !

MallyGirl

unless you can definitely pay the dentist bill, and any other purchases you might make, within what is left of the 3 month deal that is wise.

chattychappy

jolester wrote: »

If I have a credit card which is 0% on balance transfers for 24 months and 0% interest on purchases for 3 months does this mean if I buy something on the card that I pay interest on the purchase after 3 months, or, anything that I buy in that 3 month period will be (and remain) 0%

Anything you purchase during the 3 months will not attract interest during that 3 months. After the 3 months are up, you will pay interest from the end of the 3 months until you pay off the purchase balance. Any BT balance will continue at 0%. Purchases made after the 3 months will attract interest from the date of purchase unless you pay the balance in full. You are unlikely to want to pay the balance in full if you have a 0% BT deal. NB Nationwide operate a bit differently, but this is the way most cards work.

MallyGirl wrote: »

Never mix purchases and BTs on a card unless the deals run for the same term.

I disagree with "never". Of course it's best to have a separate 0% purchases card. But if not, then the OP might as well benefit from the 3 month deal for the dental bill. Most CCs will apply payments to the purchases first (because the deal expires first), but to be sure of this it would be best to pay off the purchase balance a day after the offer expires thus incurring one day's interest which would be peanuts.

Alternatively, if the window to do a BT is still open and the OP has another card available, then he/she could put the dental charges on that and then transfer the balance to take advantage of the 24 month deal. There would be a BT fee to pay, though.

abderrahmane

yes of curse you must !!

[Deleted User]

abderrahmane wrote: »

yes of curse you must !!

Reported for illiterate post building.

bigadaj

Deleted_User wrote: »

Reported for illiterate post building.

You'll be cursed!

Ben8282

MallyGirl wrote: »

Never mix purchases and BTs on a card unless the deals run for the same term.
After the 3 months 0% on purchases is up you will be hit for interest from the day of purchase, not from the statement date, as you will not be paying off in full every month (which is the condition you must meet to receive your 'up to 56 days interest free' normal CC operation.)

3 months is not worth even going there for the added complications. Leave it as a BT card only - lock the card away in a drawer and just pay the minimum payment by DD. Get a separate card for 0% if you want that as well/qualify for one.

This is incorrect. Don't pay attention to this misinformation.


Purchases will be interest free from the date you open your account until 3 months from that date is reached when you will be charged interest. Just make sure that your purchases are fully repaid by that date. Make absolutely sure that all purchases have appeared on a statement before repaying them.


Although such 3 month purchase offers are of very little use for long term 0% borrowing or stoozing purposes, there are situations where such offers can be useful. An example of this would be where the BT had been used to repay an interest bearing balance . The 3 month period can be used to transfer spending for 1 or 2 statement periods giving the other card a chance to be put into a situation where it can be used for spending and repaid in full every month without interest.
I would suggest that further purchases are stopped at a point so that all purchase appear on the statement prior to the statement immediately prior to the statement after which interest is to be charged, just to be on the safe side.
Example: Account opening date 15th July 0% on purchases will therefore end 15th October.
Imagine statement date is 5th of month.
Cease all purchases prior to 5th September statement.
Repay all purchases on this statement by payment due date.


It is also possible that using a card for substantial purchases during this period and repaying in this manner will be beneficial in terms of the lenders view of the conduct of the account.

MallyGirl

There is no misinformation. A more experienced CC user - which the OP did not come across as - would be able to manage the differences in terms and maximise use of the 3 months as well but this board is littered with people who did not realise that they would lose the 'up to 56 days interest free' aspect of the CC due to the ongoing BT balance. Better safe than sorry for the majority.