New to credit cards, does 0% on purchases mean you paying nothing for that length of time?

textbook

Mainly used debit cards in the past but does 0% on purchases, mean you pay nothing in interest until the length e.g. 20 months expires?  Then transfer to another card to continue paying nothing while trying to pay it off?

I need to borrow £5000 

eskbanker

It means no interest but you still need to make the minimum monthly repayments of the debt, typically 1-3%.

And at the risk of stating the obvious, borrowing on a 20 month deal when already contemplating not being able to repay in full over that period really isn't a good plan!

Brie

If you need to borrow £5k then you might be better off with a card offering a money transfer at 0%.  That way you can take the credit on the card and put it into your bank account.

Do check the T&Cs for whatever card you have.  Paying the minimum is essential so set up a DD for that at least.  Whatever the offer is (purchase or money transfer) check if there's a certain time frame from when you get the card to use this offer.  Sometimes it will be 0% on purchases for 20 months but only for those made in the first 3 months.  Also be sure you know what happens if you use this for other things.  If it's 0% for money transfers or 0% for purchases for 3 months if you then use the card in month 4 or 5 you will be charged interest from the date of that purchase as you haven't cleared your balance in full the previous month.  

CliveOfIndia

textbook said:

does 0% on purchases, mean you pay nothing in interest until the length e.g. 20 months expires?

Essentially yes - though you do need to make the minimum payment each month.  If you miss a payment, usually the 0% promotional rate will be immediately withdrawn.

textbook said:

Then transfer to another card to continue paying nothing while trying to pay it off?

Again, yes in theory.  But you need to plan for the fact that you may not be able to transfer to another card - so you'll need to have the money saved up to clear the balance when the promotional rate expires.  And even if you can do a BT, remember to factor in the BT fee.

textbook said:

I need to borrow £5000 

"Need" to borrow, or "want" to borrow?  As noted by a previous poster, it's always rings alarm bells to hear of planning to take out credit card debt with the intention of not being able to repay it.

And aside from all that, does the person you're planning on buying from even accept credit cards?  If you're buying goods from a large shop then it's usually no problem.  But things like paying a builder, plumber, quite a lot of "services rather than goods" - they often won't accept card payments.

Used prudently a credit card can be an extremely useful tool.  But used unwisely or without fully understanding how they work can all to often lead to a vicious cycle of debt.

born_again

textbook said:

Mainly used debit cards in the past but does 0% on purchases, mean you pay nothing in interest until the length e.g. 20 months expires?  Then transfer to another card to continue paying nothing while trying to pay it off?

I need to borrow £5000 

You could subject to the above posts
But there is no guarantee that you will get another card with a suitable balance to transfer the debt to.

km1500

Also be aware that, for example, on a 2 year balance transfer card it may (or may not) have a condition that the purchases must happen in (say) the first sixty days.

textbook

km1500 said:

Also be aware that, for example, on a 2 year balance transfer card it may (or may not) have a condition that the purchases must happen in (say) the first sixty days.

Where would I find that info out?

horsewithnoname

textbook said:

km1500 said:

Also be aware that, for example, on a 2 year balance transfer card it may (or may not) have a condition that the purchases must happen in (say) the first sixty days.

Where would I find that info out?

Same place you apply for the card - the website should have the t&c on there 

eskbanker

km1500 said:

Also be aware that, for example, on a 2 year balance transfer card it may (or may not) have a condition that the purchases must happen in (say) the first sixty days.

OP's scenario envisages a 0% purchases card and then separately, later, a balance transfer card (which would be from a different provider).

CliveOfIndia

horsewithnoname said:

textbook said:

km1500 said:

Also be aware that, for example, on a 2 year balance transfer card it may (or may not) have a condition that the purchases must happen in (say) the first sixty days.

Where would I find that info out?

Same place you apply for the card - the website should have the t&c on there 

This.  Or, probably even safer, check the T&Cs document that you were sent (either via email or in hardcopy format).  This will tell you unequivocally what T&Cs apply to the particular product you were given.  More than likely it'll be the same as the generic T&Cs published on their website, but it doesn't hurt to be doubly-sure.

textbook

Applied and got another card- £3800.  Think it's £3800 on 0% purchase.   I need £5400 to get freehold.  Can I pay using these two and my £1200 Barclay card?