n00b unsure about cards

Jimmy_Boy

Although I have had a credit card for many years, I generally use it just once a month for small purchases (up to about £200 of £2000 limit) and pay it in full immediately. However, after a little exploring around clearscore, I became aware of 'Transfer' and 'Purchase Credit' cards. Now, I could be accused of living under a rock, but I was not aware of such things, and I am tempted to make use of one, but would like to make sure I have the correct understanding of how they work.

I am currently having home improvement work done which is consuming most of my income, but in the next few months this should be completed. However, there are some Black Friday deals on that I would really like to take advantage of NOW, as I could make some massive savings (About £4000 worth of products can be had for about £2000 during black friday).

As an example, this is one of many offers I have:


So, I have a few questions

1. What exactly is meant by a 'Transfer' ? I assume this means I could make a purchase on my current credit card, and then transfer that debt on to this card ?
2. I assume this would also allow me to make purchases just like a normal credit card
3. This card has a 21 month purchase and transfer duration, I assume this means I could use this card to purchase say £2000 worth of products, and for 21 months there would be 0% interest. Within that 21 month period I could pay in dribs and drabs to bring the balance down and/or pay the whole lot at any time. As long as I pay in full before 21 months, then this credit would cost me nothing ?
4. The blurb says 'Balance transfers, money transfers and purchases must be made within the first 60 days to get the promotional offers.'. Does this mean that essentially this 0% interest is an offer only for the first 60 days? After 60 days it essentially becomes a 'normal' card with a 21.9% APR ?
5. Does this card seem like a good deal ?
6. Does my proposition make financal sense ? ie. Use this card while spare cash is tight (due to home improvements) to save big with black friday savings... then when home improvements are complete and cashflow is freed up, I can then pay this card in full.

Thanks in advance.

[Deleted User]

1) Yes. But since you'd pay a fee, you'd just make the purchase on the card that offer 0% on purchases.
2) Yes, but if you get a card which doesn't offer a 0% on purchases, you'll pay interest on those purchases. The M&S card above has a corresponding offer on purcchases.
3) No. You'd pay the BT fee for anything you transfer. You'd also need to make at least the monthly minimum payment, not just 'dribs and drabs'.
4) Yes.
5) Yes, it's fairly good, though a fee free card would be better.
6) Only if you have a definite plan to repay. Otherwise, no.

Jimmy_Boy

Thanks for clarifying. Appears as I might not of got point 3 quite correct. Where would I find the specifics of what the monthly minimum payment is ?

[Deleted User]

In the terms or key facts document of each card. The norm is 1% of balance plus fees and interest, but some are higher.

molerat

One more point

4) Yes it becomes a normal card after 60 days so, as you are not paying off the card balance in full, all future purchases will bear interest from day1.

Probably a reasonable card to make all those purchases within the first 60 days, set up a DD for minimum payment then put the card away in a drawer and don't use again keeping an eye on the reducing balance and make sure you have a plan to pay it off.

The actual minimum payment will be in your personal quote for the card.  Many cards are increasing the minimum % away from the old 1% and some are tailoring that minimum % to individual accounts.

Alex9384

I think it's just MBNA that offers the %0 rate only on purchases made within the first 60 days.
With Halifax and Lloyds (same banking group as MBNA) credit cards, you can make purchases at any point within the 18-21 month introductory period and they will not incur any interest.
The minimum payment is somewhere between 2% and 3% of the total balance. I believe my Halifax and Lloyds are both 2.25% at the moment.

Alex9384

Good thing is that Halifax, Lloyds and MBNA have eligibility checkers on their websites. They will show you how likely you are to get accepted, as well as what your estimated credit limit will be before they run a hard search on your credit files.