How does a 0% purchase CC work in reality?

[Deleted User]

Hi, have a quick question regarding maybe a purchase using a 0%purchase CC, I have seen one for example that gives you 0% on purchase for 24 months.  So say for example you had one of these cards and you wanted to make a decent one off purchase. Could you purchase it on the CC then over the course of the 24 months pay it off, if for any reason you still had an outstanding balance could you then get a 0% balance transfer card and transfer the remaining balance onto that?

Asking because rather than using savings or say a loan with a typical APR of 6-8% you could surely save a lot of money in interest with the CC option.

cymruchris

Deleted_User said:

Hi, have a quick question regarding maybe a purchase using a 0%purchase CC, I have seen one for example that gives you 0% on purchase for 24 months.  So say for example you had one of these cards and you wanted to make a decent one off purchase. Could you purchase it on the CC then over the course of the 24 months pay it off, if for any reason you still had an outstanding balance could you then get a 0% balance transfer card and transfer the remaining balance onto that?

Asking because rather than using savings or say a loan with a typical APR of 6-8% you could surely save a lot of money in interest with the CC option.

Assuming you could get a limit large enough to cover your purchase price - then yes it would be interest free over the period of the offer, subject to you making the minimum monthly payment on time. Most card providers will pull the interest free option if you are late paying or miss a payment. As to the balance at the end of your offer period - it'll depend on whether you qualify for a further promotional rate card elsewhere at that time, and bear in mind there may be a transfer fee to move your remaining balance over if you do. 

[Deleted User]

cymruchris said:

Deleted_User said:

Hi, have a quick question regarding maybe a purchase using a 0%purchase CC, I have seen one for example that gives you 0% on purchase for 24 months.  So say for example you had one of these cards and you wanted to make a decent one off purchase. Could you purchase it on the CC then over the course of the 24 months pay it off, if for any reason you still had an outstanding balance could you then get a 0% balance transfer card and transfer the remaining balance onto that?

Asking because rather than using savings or say a loan with a typical APR of 6-8% you could surely save a lot of money in interest with the CC option.

Assuming you could get a limit large enough to cover your purchase price - then yes it would be interest free over the period of the offer, subject to you making the minimum monthly payment on time. Most card providers will pull the interest free option if you are late paying or miss a payment. As to the balance at the end of your offer period - it'll depend on whether you qualify for a further promotional rate card elsewhere at that time, and bear in mind there may be a transfer fee to move your remaining balance over if you do. 

Thanks for the info, its potentially a good way of saving a hell of a lot in interest.

MrFrugalFever

With the below assumptions you would be correct in your understanding;

- you get approved for the CC
- the merchant you intend to purchase your item from accepts CC payment (in full)
- you get the limit you want

You’ll need to ensure you make EVERY payment on time (minimum at least). Do not assume you’ll be able to transfer balance at the end so plan to have it all paid off by end of promo rate.
Any purchases made during the promo period will continue to be at 0% until the prom9 ends.

binao

There's no such thing as a free lunch.

DullGreyGuy

Deleted_User said:

cymruchris said:

Deleted_User said:

Hi, have a quick question regarding maybe a purchase using a 0%purchase CC, I have seen one for example that gives you 0% on purchase for 24 months.  So say for example you had one of these cards and you wanted to make a decent one off purchase. Could you purchase it on the CC then over the course of the 24 months pay it off, if for any reason you still had an outstanding balance could you then get a 0% balance transfer card and transfer the remaining balance onto that?

Asking because rather than using savings or say a loan with a typical APR of 6-8% you could surely save a lot of money in interest with the CC option.

Assuming you could get a limit large enough to cover your purchase price - then yes it would be interest free over the period of the offer, subject to you making the minimum monthly payment on time. Most card providers will pull the interest free option if you are late paying or miss a payment. As to the balance at the end of your offer period - it'll depend on whether you qualify for a further promotional rate card elsewhere at that time, and bear in mind there may be a transfer fee to move your remaining balance over if you do. 

Thanks for the info, its potentially a good way of saving a hell of a lot in interest.

If you have to transfer to another card you are then likely to be paying a transfer fee 

It is in principle a good way but its dependent on good discipline and things coming together... some may not pay down the 0% purchase card quickly enough and then fail to secure the balance transfer card so end up pay 23% on the CC rather than 6% of a loan.

Secondly, it becomes a rabbit hole for some, they end up not just making the one off purchase but a whole host of purchases and that then increases the chances of not getting a BT card with sufficient limit and then the high CC interest kicks in