How does 23 months interest free work exactly?

fitzykev

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

MorningcoffeeIV

It means whatever balance you accrue at 0% will need to be repaid before the end of the promo period to avoid interest.

If you mix any interest bearing transactions on there, you would need to repay the full amount (of all sub balances) by the next statement to avoid interest.

So just use it for the 0% offer and clear it before the 0% expires.

DullGreyGuy

You need to read the exact terms but the 23 months will run from when you open the account not the date of the purchase. With some lenders its only purchases in the first X months of account opening that are eligible for the interest free rate... also make sure its purchases it applies too... some offer 23 months but its only for balance transfers and not purchases.

grumbler

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. 

Interest free on what? It can be on

• purchases
• balance transfers
• both

https://bank.marksandspencer.com/credit-card/?cid=HBEU:ma:P0:CC:NA:1804:074:Brand

CliveOfIndia

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

Basically yes.  But you do need to clarify whether its interest free on purchases or balance transfers - or both, as mentioned by the previous poster.

But yes, in essence you've got the correct idea - though do take note of the very pertinent points raised by previous posters.

In terms of repaying it, you can either divide the total by 23 months and pay that each month, as you describe.  Alternatively you could pay only the minimum each month, and put the difference between that and the £86.95 each month into a savings account.  When the promotional rate expires, use your savings to repay the full balance, and treat yourself with the small amount of interest you'll have earned.

Just be very careful when it comes to month 23.  Make sure you repay the full balance before the promotional rate expires, which may possibly be slightly earlier than your "payment due" date.

grumbler

CliveOfIndia said:

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

In terms of repaying it, you can either divide the total by 23 months and pay that each month, as you describe.  Alternatively you could pay only the minimum each month,...

Another option is a fixed payment each month slightly bigger than the minimum payment required. Lenders are obliged to pester customers consistently making minimum payments and, reportedly, this can have a minor adverse effect on your credit history.

Belenus

grumbler said:

CliveOfIndia said:

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

In terms of repaying it, you can either divide the total by 23 months and pay that each month, as you describe.  Alternatively you could pay only the minimum each month,...

Another option is a fixed payment each month slightly bigger than the minimum payment required. Lenders are obliged to pester customers consistently making minimum payments and, reportedly, this can have a minor adverse effect on your credit history.

I have done a lot of no fee 0% interest stoozing on credit cards. I set them up to pay the minimum each month by direct debit and only repaid in full a few days before the 0% interest period ended.

I was never pestered to pay more than the minimum.

Perhaps they only pester account holders who are accruing interest payments.

MorningcoffeeIV

grumbler said:

CliveOfIndia said:

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

In terms of repaying it, you can either divide the total by 23 months and pay that each month, as you describe.  Alternatively you could pay only the minimum each month,...

Lenders are obliged to pester customers consistently making minimum payments 

Not those on 0% promos.

paul_c123

Belenus said:

grumbler said:

CliveOfIndia said:

fitzykev said:

I am new to credit cards M&S have gave me £3500 limit with 23 months interest free. Does this mean say for example I spend £ 2000 of this and pay £2000 back at £86.95 per month i won't pay any interest? 

In terms of repaying it, you can either divide the total by 23 months and pay that each month, as you describe.  Alternatively you could pay only the minimum each month,...

Another option is a fixed payment each month slightly bigger than the minimum payment required. Lenders are obliged to pester customers consistently making minimum payments and, reportedly, this can have a minor adverse effect on your credit history.

I have done a lot of no fee 0% interest stoozing on credit cards. I set them up to pay the minimum each month by direct debit and only repaid in full a few days before the 0% interest period ended.

I was never pestered to pay more than the minimum.

Perhaps they only pester account holders who are accruing interest payments.

"Obliged to pester customers making min payments"........there are regulatory requirements around Persistent Debt. I I believe events occur at months 18 and 36 of being in persistent debt. But the trigger points won't occur if you are on a long interest free deal, since after all the most efficient way to manage these is to pay the minimum, then pay it off. By "events" or "trigger points", I mean that they constantly monitor accounts for PD but are obligated to write to you to inform you of the PD, then at some point, no longer offer credit until you are out of persistent debt.

The definition of Persistent Debt is where you paid more in interest and charges than the amount repaid. So, 0% deals won't trigger it, 3.9% deals might do if the min repayment is eg 2.5% of the outstanding balance, but I believe most CC providers increased the min repayment amount to specifically avoid the PD issue.

Alex9384

paul_c123 said:

The definition of Persistent Debt is where you paid more in interest and charges than the amount repaid. So, 0% deals won't trigger it, 3.9% deals might do if the min repayment is eg 2.5% of the outstanding balance, but I believe most CC providers increased the min repayment amount to specifically avoid the PD issue.

Yes, it's usually 3% minimum payment. Interestingly, Santander credit card minimum payment is only 1%.

Alex9384

MorningcoffeeIV said:

Not those on 0% promos.

Unless you keep spending on that card as well.

I did a money transfer of a little over 7k from my Barclaycard and then kept spending on it every month, around 200-300 on new purchases. I wanted to make the most of the offer, so every month minimum payment would be basically just paying back the new purchases without reducing the money transfer balance. Later on they sent me a letter, something about financial difficulties and that I can contact them if I need to. I didn't need to so I just ignored it. Couple months later they reduced my credit limit which took it just a little bit above my balance.
Then I wrote them and politely asked them to not mess with my credit limit anymore and promised to stop any new spending on the card as well as increase monthly repayments. No more credit limit reductions but I've been unable to increase the limit ever since. Also no more money transfer offers, only BT on that card and one 0% purchase offer a few months ago.