0% credit cards

itsme999

Hi

I am buying a couple of high value items in the order of few thousand pounds and came across zero percent credit cards; applied for the Natwest card and within mins email from bank saying new shiny card on the way, btw I am premium Natwest customer so would have been v disappointed if was declined,

I have no issue with affordability to paying for the above purchases straight away but thought why not use a 0% card , I know I need to watch the terms as it's only for 23 months or so then reverts to 24% and also spread monthly payments towards the purchases.

Currently I only have one Natwest reward card, used for daily needs which include shopping, petrol and entertainment, always paid straight after spending and even over pay sometimes. Current limit £7k. I also have a Next card but never used.

Is it wise to buy high value items and spread payment using 0% C/C? Is there a catch from the banks offering 0% for X months? Any thing else I should look out for?

Thanks

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6681961/0-credit-cards

Its a sensible approach, even more so if its a reward card too.

If you buy one item straight away and pay it off before using the card ever again then no catch at all… some cards require the purchase within X days of the account opening, others its any purchases in the interest free period which can confuse people.

The biggest one is those continuing to make purchases after the X days or on BT cards, traditionally those purchases would have interest being applied from day 1 but these days some will ignore promotional balances in relation to the necessity to clear the balance in full as not to incure interest.

CliveOfIndia

There's no catch as such, it's a very sensible plan, and the previous poster makes some very good points.

The main thing is to make sure you know exactly when the 0% rate expires, and make sure you pay it off before then. This may not coincide with your scheduled payment date. For example, it may be that the 0% offer expires on the 14th of the month, but your usual payment date (particularly if you pay by DD) may be the 21st of the month. So you'd need to make an extra manual payment on the 13th to be sure. OK, you're only talking a few days worth of interest, but there's no point paying interest if you don't need to.

"and also spread monthly payments towards the purchases.". There are two ways of approaching this. You can set your monthly payment at an amount that means the balance will be paid after the 23 months. Or you can just pay the minimum each month, and also put money aside into a savings account. That way, you'll have the money ready for when you need to pay the remaining balance, plus you'll earn yourself a bit of interest on it. Obviously, you need to be disciplined enough not to touch the savings in the meantime. And if you need to give notice to make a withdrawal, factor that into your calendar so that you can get the money when you need it.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82124047#Comment_82124047

Thanks for reply. My current card is reward linked to my main current a/c, no idea if new card is reward, will find out when arrives but don't think so because didn't ask to be linked to any of accounts.

HillStreetBlues

Make sure you don't miss a payment, as they can withdraw the offer if you do.

itsme999

SO I applied to Natwest bank who I am premium customer for 0% C/C and was issued with one, I asked for £3k limit but was given £8k.

At the same time I applied M&S 0% c/c and was refused. This is second time as in many months been refused credit for up to £5k. My credit ratings are 1150 of 1250 with Experian and 646/710 with the other one thru Karma. My income is well over £50k in self assessments, I fully own more than one property, my incomes are rent, investments and bank interest. I don't have full time employment / PAYE which I believe is the cause of being refused credit from seems anywhere except my bank?!

Desmond_Hume

It’s more likely to be the sudden increase in requested credit that’s the issue, over and above all the other credit that’s available to you (you’ve mentioned other CCs and store cards). You’ve also found out that the credit scores don’t actually mean anything in the UK. A point that’s repeated over and over again on this forum.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82127298#Comment_82127298

I don't think sudden increase, one in July refused was to finance £6k at 0%; then this week applied M&S then Natwest CCs.

I am new to the forum and significance of credit score; haven't applied for any form of credit/borrowing since 1990, that could more likely the reason rather than sudden increase in requests.

I still feel lack of regular job income is the main reason, I don't even have pension income for another few years.

But Natwest were keen to give nearly 3 times above my requested amount.

The_Groat_Counter

https://forums.moneysavingexpert.com/discussion/comment/82127327#Comment_82127327

Different lenders operate with different lending criteria.

In particular, a lender with whom you also do your main banking (i.e. hold a current account with) has visibility of a lot more of your financial affairs than other lenders which naturally do not have this view.

In your case, it seems NatWest - of whom you are "a premium customer" - was the one willing to lend.

itsme999

Update: I got my card 10 days ago or so, it's not reward card but is OK, I started using it on high value purchases and already set monthly direct debit to pay all before the 24 months 0% expiry date.

Thanks all for the replies.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/82140310#Comment_82140310

If you have the discipline, then it's best is to pay the min amount and the rest in a savings account such as a reg saver and earn as much interest as possible.
But if not then paying it all off monthly is the way to go.