0% purchase card - what does it mean exactly?

wiseonesomeofthetime

a03b said:

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?

It is also important to time that final IN FULL payment correctly.

Personally, I always settle mine at the term, minus one month.

For example, my current 0% purchase offer expires on 16 May 2025.

I will pay April's statement off in full on 10 May 2025, so nil balance when that May date arrives and next statement created. Ensures no hiccups and no interest paid.

Meanwhile, the money to pay it off has been earning interest for me at 5% and above

The_Groat_Counter

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You must make (at least) the minimum payment every month, otherwise your 0% offer will be rescinded.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

This is a great summary. It's well worth spelling things out as it's possible to get in spectacular mess with credit cards if things are done wrong.

Having a Direct Debit set up for mimimum payment is I'd say a "must do" when on a 0% interest deal (whether that be purchase or balance transfer).

prowla

a03b said:

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?

You get a monthly statement showing the outstanding amount (which will reduce each time by the preceding payment) and the minimum payment required.

The only gotcha is to not miss a payment.

Actually, I did hit a second gotcha some years ago with a balance transfer one, where the small-print said that payments were towards the outstanding balance, not new purchases and so it meant they incurred interest until that was paid off. (I paid that one off straight away when I saw that and cut the card in two.)