0% interest credit cards 29 July 2022 at 3:30PM in Credit cards 5 replies 171 views

NedS

Hi all,

Currently working, no debts, always had a credit card (25+ years) and paid it off in full every month (1-2k per month). Never paid a penny of interest, ever.

We currently put all our routine monthly spending on our cards, and pay it off in full at the end of every month.

However, we are due to retire shortly, and our income stream will change from monthly to quarterly (3 monthly), so I'm looking for recommendations (and if it's possible) to get a 0% interest credit card that we can continue use for all our routine spending and then pay off in full every 3 months as we receive income. We'd need around £5k of credit I'm guessing. Is this realistic / feasible? I see most 0% deals are for around 24 months max, so presumably every 18-24 months we'd have to apply for new cards to keep the 0% interest. Current credit score on things like Experian is excellent.

[Deleted User]

As you;ve seen, 0% purchase cards are only for a limited time.

Although you'll be able to apply for new cards, lenders will assess you on your circumstances, not on the pretend credit scores from the CRAs, so it depends on what view they take of your situation post retirement.

Ideally, you would have built up enough in savings to tide you over for at least several months, so would be able to clear your cards in full each month as you currently do. This would avoid any reliance on 0% offers.

Ebe_Scrooge

As per the above, you're not going to get a card that gives you 0% in perpetuity.  And it would be very unwise to bank on being able to get a new 0% card every time you need one.

You just need to use an ordinary credit card as you currently do, and pay it off in full every month.  Despite the fact that your income will change from monthly to quarterly, the principles of budgeting remain unchanged.  Presumably you currently don't spend more on the card than you know you can repay at the end of the month?  It'll be the same principle - if your income will become £3000 every quarter, you just need to divvy that up and say to yourself "That's £1000 each month I can spend" (it doesn't matter what the actual figures are, it's just the principle that matters)

NedS said:

I'm looking ... a 0% interest credit card that we can continue use for all our routine spending and then pay off in full every 3 months as we receive income.

That's not really the best way to use a 0% card anyway.  You still have to make at least the minimum payment every month, and if you repay in full after three months (assuming you got, say, an 18 month offer), you're not really using it to best advantage.

I think you just need to continue to use your standard card for routine spending, and make sure you budget so that your quarterly pay-cheque (as it were) will last you for 3 months - allowing for the fact that you'll need to repay your card at the end of each month.

NedS

Thanks both for your input.

Ebe_Scrooge said:

NedS said:

I'm looking ... a 0% interest credit card that we can continue use for all our routine spending and then pay off in full every 3 months as we receive income.

That's not really the best way to use a 0% card anyway.  You still have to make at least the minimum payment every month, and if you repay in full after three months (assuming you got, say, an 18 month offer), you're not really using it to best advantage.

It's the best use of a 0% card for others, but it is in our circumstances (I have no issue making the minimum payment each month). It's a cash flow issue and would be beneficial in our circumstances to manage our cash flow in this way.

Brie

You could get a 0% purchase card to get you through the first 3 months and then start paying after that.  Many of them may be for 6 months, perhaps a bit more.  It's usually the balance transfer deals that go to 18 - 24 months.

And of course you could get a 0% balance transfer card and instead of paying in full every month as you have in the past transfer the full amount from your normal card to the BT card during the transition period.  This will cost you of course - maybe 4% of the amount you transfer each time?  So £40 for each £1000.  

And as others have said you will still need to pay at least the minimum each month no matter which card you get.  If it's a 6 month 0% purchase card there will be no fees but you have to be prepared to clear the whole thing at the end of the 6 months.  With a longer term BT card you could just let the minimum DD edge it down and maybe change that to a set amount to month/quarter to clear it down in time.

Either way DO set up at least a minimum DD as missing a payment will lose you your 0% deal and then you'll really know what paying interest on a card is like!!!

daivid

Check the small print carefully on the card, as some are 0% on purchases for the introductory term, but others (perhaps most) are 0% on purchases in the first x days for y months. If you were to get one of the former perhaps you could use it for long enough to build up a reserve that will get you through future 3monthly periods, pay the minimum each month on your 0% card and the balance before it ends then top up the reserve every 3months for the next 3 months. This will take discipline and, unless you have saving you prefer not to call on but can in need, sounds precarious.