New To Credit Cards 6 September 2022 at 11:25AM edited 6 September 2022 at 11:27AM in Credit cards 6 replies 277 views

Englander

Hi all,

I'm looking at a 0% interest credit card for up to 24 months.  The questions I would like to ask are as follows:-

1) If I do not purchase anything at all am I still charged a monthly fee ? (just out of curiosity wanted to know this)
2) Lets say I apply for a card and get accepted, does this mean the 24 months 0% interest begins when accepted or when I make the first purchase ?
3) If I buy something for say £300 on the card at 24 months 0% interest, am I paying a fee each month on top of this £300 purchase or do I simply just have to pay the £300 back within that 24 months ?

Thanks all

TadleyBaggie

1) What monthly fee? No mainstream cards I'm aware of charge a monthly fee.

2) The 24 months start when your application is accepted.

3) Again what fee? You have to pay at least the minimum payment each month (typically 5% but it varies), but as long as the amount borrowed is paid back within the agreed period no interest is charged.

Englander

TadleyBaggie said:

1) What monthly fee? No mainstream cards I'm aware of charge a monthly fee.

2) The 24 months start when your application is accepted.

3) Again what fee? You have to pay at least the minimum payment each month (typically 5% but it varies), but as long as the amount borrowed is paid back within the agreed period no interest is charged.

Cheers.

I wasn’t sure if there was some sort of additional fee or charge that has to be paid each month in addition to the minimum payment regardless of whether you make a purchase or not.

Thanks

WillPS

TadleyBaggie said:

1) What monthly fee? No mainstream cards I'm aware of charge a monthly fee.

...

3) Again what fee? You have to pay at least the minimum payment each month (typically 5% but it varies), but as long as the amount borrowed is paid back within the agreed period no interest is charged.

Santander probably: https://www.santander.co.uk/personal/credit-cards/all-in-one-credit-card

cymruchris

If you're new to credit cards - and this will be your first - there's a fair chance that unless you have lots of credit history from other sources, you may not qualify for a 24 month interest free card initially. Best to enter your details through the eligibility checkers directly on the card providers websites (not through comparison sites) to see your likelihood of approval. If you're getting low chance/straight no's on the 24 month card you've looked at - lower your sights to a credit building credit card such as Aqua/Capital One/Vanquis. These will have astronomical interest rates - but use them - pay in full - and by building up a positive credit history, you're more likely to qualify for the better products further down the line. 

Ebe_Scrooge

Englander said:

1) If I do not purchase anything at all am I still charged a monthly fee ? (just out of curiosity wanted to know this)

Most mainstream card don't charge an annual fee, as a previous poster mentioned.  There are some that do, so just make sure you check - it'll be clearly stated on the T&Cs.  For most folk, there's no point in a fee-paying card, unless the benefits are worth more to you than the annual fee.

Englander said:

2) Lets say I apply for a card and get accepted, does this mean the 24 months 0% interest begins when accepted or when I make the first purchase ?

The interest-free period begins from the time the account is opened.  Check the T&Cs of any card you apply for, to confirm when purchases can be made.  Some cards will charge no interest on purchases made during the first (for instance) 3 months of opening the card.  Others will not charge interest on any purchases made during the life of the promotional offer - although, of course, if you make a purchase in month 22, you'll only benefit from 2 months of 0% interest.

Englander said:

3) If I buy something for say £300 on the card at 24 months 0% interest, am I paying a fee each month on top of this £300 purchase or do I simply just have to pay the £300 back within that 24 months ?

Assuming it's a fee-free card then you need to make at least the minimum payment each month (this will be detailed on each statement).  It's best to set up a Direct Debit for the minimum payment.  If you fail to make at least the minimum payment each month, the 0% will usually be instantly revoked, and you'll start paying interest at the card's standard APR - as well as being charged a late-payment fee, and having a late-payment marker added to your credit record.

Also, you absolutely must plan to repay the outstanding balance in full by the time the promotional rate expires.  Once the promo finishes you'll start paying interest, with no guarantee that you'll be able to transfer any remaining balance to another card.

A couple of final points.  As a previous poster mentioned, you may find that you struggle to get accepted for a 0% card if you have no or very little previous credit history.  Also, to be pedantic, the card is not, strictly-speaking, "interest-free".  It just charges interest at 0% rather than 23% or whatever.  It's the same thing as far as cold hard cash is concerned, and how much interest you'll pay - but it's a point of semantics :-)

Englander

Thanks for all the replies. Makes sense now.