0% on purchases - how does it work?

dc2447

I want to buy a car for my other half. Cashflow is a little bit tight until later in the year when I get some payouts from some shares I have. I was thinking of getting a credit card with 0% on purchases for 6 months but don't know how they work.

Do you have to do something special when you make a purchase on one of these cards and don't want to pay for a few months? Is the 0% on purchases only for an introductory period? Do you just pay the minimum every month?

Any information gratefully received.

miaxmia

Hi, You use your card (anything up to your limit) to pay for all your purchases and then each month you have to pay a minimal amount off the loan until the introductory period is finished when you are best to pay your loan off otherwise the interest rate is hefty. Some cards offer 12 months 0% on purchases. If you are thinking of purchasing a car with it I am not sure that garages are keen to take credit cards. I have tried in the past (but they may take card if you pay their handling fee - you would need to check on that) Virgin are doing 0% on balance transfers for 15 months, although there is a 2.98% handling fee. They will pay the money direct into your bank acount or you can have cheques to use, but if you do this you are best then not to use the card for anything else as purchases would not come under the 0% rate. Works in the same way, you pay a minimal amount off each month. Go to the website and look at the summary box for more details.

dc2447

Thanks - I don't like the sound of the handling fee. I assume I'd be able to get a card without a handling fee, I don't need 15 months.

miaxmia

You can get a 0% card without a handling fee if you are using it for purchases, but I searched yesterday for a card with 0% on balance transfer and I don't think they exist.

moozikgal

Ulster Bank currently are doing 6months 0% with no fee - http://www.ulsterbank.co.uk/ni_01.asp?id=PERSONAL/CREDIT_CARDS

Email them and they'll send an application form through the post, unless you happen to live near one of their branches in Ireland!

Capital One also have an offer on balance transfers with no fee, but you need an "excellent" credit rating - see http://www.capitalone.co.uk/creditcards/cards.jsf

For a full list of cards currently available with 0% BT's see http://www.stoozing.com/0fees.htm

dc2447

miaxmia wrote: »

You can get a 0% card without a handling fee if you are using it for purchases, but I searched yesterday for a card with 0% on balance transfer and I don't think they exist.

yeah - just need it for purchases. Car Giant and places liek that all take credit cards for cars.


Cheers

exel1966

In theory it's a good way of making the purchase, but in reality as previously stated you may find it difficult to find a garage willing to accept a credit card card payment for the car due to the transaction fees they'll be liable for.

How much is the purchase ?

If the garage will accept the card you could always try and haggle about the possible fee they'll pass onto you. It will all depend how much their already making on the sale and waht kind of deal you've already managed to strike with them.

If you're successful, ensure you set up a DD to pay the minimum each month. That way you won't leave yourself open to any potential late charges and a withdrawl of the 0% fee. Be aware that if for any reason you DO NOT comply with any payments/meet time deadlines etc they can and WILL remove your offer and charge you interest from DAY 1.

YorkshireBoy

It'll cost the car dealer 1-2% (in merchant acquirer fees) to process your payment by credit card. If he says he's willing to waive that fee then you didn't haggle hard enough on price...fact!

You could get the car by using Egg Money and another 0% fee free BT card, but your lack of knowledge on how cards work would suggest you've never had one. That may mean, due to a lack of credit history, you can't get the two cards necessary.

Phantom_Flan_Flinger

dc2447 wrote: »

yeah - just need it for purchases. Car Giant and places liek that all take credit cards for cars.

Actually, Car Giant don't accept credit cards, only debit cards.

From their documents required page -

We do not accept the following forms of payment
Credit CardsCharge CardsPersonal ChequesCompany Cheques

These companies would typically have to pay a fee of somewhere around 2-3% to the credit card companies to put through a payment. They might give you the option of paying that fee if you asked.

dc2447

In theory it's a good way of making the purchase, but in reality as previously stated you may find it difficult to find a garage willing to accept a credit card card payment for the car due to the transaction fees they'll be liable for.

How much is the purchase ?

3 or 4 K

mmm - I just checked car giant and they don't take credit cards, so back to the drawing board.

looks like I'll have to take some type of short term loan with no penalty for early repayment

What a pita

exel1966

That would have left the dealer with up to £120 to pay the credit card company for permitting you to purchase the car with a card.

Either way it doesn't matter now !