O% credit cards

cathie1

Hi. Hope not too silly a question but unable to find the answer by googling or using AI. I am dyslexic with figures.

I don't have a credit card (never use them) and thinking of applying for a 0% long term one - to use occasionally to hire a car (they often ask for a large refundable deposit) or, an emergency where my bank debit card gets damaged or lost (happened twice before and I was stuck over a bank holiday. So, importantly - I may never use the credit card at all but want the security of having it. It seems looking at such cards you still need to set up a d/d to pay monthly minimum repayment - even if you never actually spend on the card?….

My questions are - is this true?/Am I understanding it correctly? And, if it is - what happens to the payments I have made at the end of the 0% period when I would want to close the card before % applied? Thanks in advance.

Isthisforreal99

I think you are slightly misunderstanding - any minimum repayment is calculated on any balance so if your balance is nil then there is nothing to pay.

CliveOfIndia

As above, the minimum payment depends on the outstanding balance on the card. Typically it'll be something along the lines of "1% of the balance or £5, whichever is greater" - different cards will each have their own particular minimum payments values. If there's zero balance then there's no minimum payment needed.

However, if you've got a card that offers 0% on purchases, be aware that this will be for an introductory period only. After that, interest will be charged at the card's standard APR.

For occasional use as you describe, you're probably best just to go for any standard card. If you can get one that offers cashback or whatever then so much the better - although, for very occasional use, it's probably not worth worrying about too much.

As long as you clear the full balance when you receive the statement, you won't be charged any interest (unless you use it for cash withdrawals, or "cash-like" purchases such as buying foreign currency).

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6681116/o-credit-cards

Some 0% credit cards can require all the spend to happen in the first X days, whilst those purchases may benefit for 2 years interest free anything post X days can still attract interest even if within the 2 years.

Doesnt sound that you actually want credit and so a reward card rather than 0% interest one would be the better.

Most credit cards the minimum payment is either X% or the interest plus Y% or £5 but with a ceiling of the total balance. So if you have a £0 balance then the minimum payment is £0 so the DD will stay there but nothing collected.

A DD isnt mandatory though, you can pay manually, but a DD is highly advisable just in case life gets in the way and it saves you from fees and/or losing any promotional rate for non-payment.

eskbanker

I don't have a credit card (never use them) and thinking of applying for a 0% long term one

You can use eligibility checkers to ascertain what you're likely to be offered, but (depending on the rest of your credit status) if you haven't had a credit card before then you're unlikely to be able to secure the best deals, so will probably need to 'walk before you run' and start with something more modest.

https://www.moneysavingexpert.com/eligibility/credit-cards/search/

As above, it sounds like you don't really need a 0% card anyway, even though that might sound appealing…