0% purchase card - what does it mean exactly?

a03b

Planning to apply to a 20-month 0% purchase card. What does this mean exactly?

Let's say I get the card with £2,000 limit. I do a £1,500 purchase.

Does this mean I pay nothing for 20 months? And in 20 months, which is December 2026, I pay £1,500 with zero interest.

Many thanks

NanookOfTheNorth

Some info here but you still need to make the minimum payment - just no interest when you dont pay in full  ...

https://www.barclaycard.co.uk/personal/money-matters/how-do-credit-cards-work/what-is-a-purchase-credit-card

and

https://www.lloydsbank.com/credit-cards/help-and-guidance/0-percent-credit-cards-explained.html

a03b

NanookOfTheNorth said:

Some info here but you still need to make the minimum payment - just no interest when you dont pay in full  ...

https://www.barclaycard.co.uk/personal/money-matters/how-do-credit-cards-work/what-is-a-purchase-credit-card

and

https://www.lloydsbank.com/credit-cards/help-and-guidance/0-percent-credit-cards-explained.html

ah ok forgot about min payment. thanks that's helpful

The_Groat_Counter

a03b said:

Planning to apply to a 20-month 0% purchase card. What does this mean exactly?

Let's say I get the card with £2,000 limit. I do a £1,500 purchase.

Does this mean I pay nothing for 20 months? And in 20 months, which is December 2026, I pay £1,500 with zero interest.

It's already been answered above, but just for the sake of clarity - no!

I've seen this confusion elsewhere before (and it's understandable enough). Essentially if you've a balance on a credit card, you'll always have a monthly minimum payment to make.

grumpy_codger

MSE:

• How do 0% purchase cards work?
• The three golden rules

CliveOfIndia

I hate to blindly reiterate what others have said, but it bears repetition if you're not sure how these things work.

So yes, you buy something for £1500, you make the minimum payment every month for 19 months, then you pay off the remainder in full.

You must make (at least) the minimum payment every month, otherwise your 0% offer will be rescinded.

You must repay in full when the offer expires, otherwise the remaining balance will be charged at the card's standard APR (ideally you'll have been putting money aside each month into a savings account to plan for this).

If you set up a DD to pay the minimum each month (eminently sensible), check your dates carefully.  It may be that your DD comes out on on the 15th of the month, but your promotional offer expires on the 10th of the month.  So in the "last month" as it were, you may need to make an "early" manual payment to clear the balance before the promotional offer expires.

a03b

CliveOfIndia said:

I hate to blindly reiterate what others have said, but it bears repetition if you're not sure how these things work.

So yes, you buy something for £1500, you make the minimum payment every month for 19 months, then you pay off the remainder in full.

You must make (at least) the minimum payment every month, otherwise your 0% offer will be rescinded.

You must repay in full when the offer expires, otherwise the remaining balance will be charged at the card's standard APR (ideally you'll have been putting money aside each month into a savings account to plan for this).

If you set up a DD to pay the minimum each month (eminently sensible), check your dates carefully.  It may be that your DD comes out on on the 15th of the month, but your promotional offer expires on the 10th of the month.  So in the "last month" as it were, you may need to make an "early" manual payment to clear the balance before the promotional offer expires.

Thank you this is super helpful as well. I have no intention to keep the balance for 20 months. I think all I need is 12 months or something 

Altior

It might not be applicable, but the other variable to watch is that ordinarily you only have a short window to utilise the offer. 

So you might get 20 months @ 0% on purchases, but only purchases made within 60 days of opening the account.

prowla

I'm just coming to the end of an 18-month interest free card.

I set up a direct debit authorisation for them to take the minimum payment each month, so I don't forget and get caught out.

I'll be paying off the balance next month.

That's £7k's worth of interest saved.

a03b

One last question (again perhaps obvious)

Let's say I do a 1,500 purchase. I do all the minimum payments. For argument's sake £25 per month.

I pay 12 months worth of minimums = £300

Then obviously I pay 1,500 - 300 = 1,200 at the end right. Not the whole 1,500?

Altior

Yes that's correct, just paying off the closing balance from the previous statement.