End of 0% interest period. how does it work?

mark_steps

How does this work? My OH had about £2500 debt last year on seperate cards with very high interest ie 29.9% on all three. I took that debt and put on an HSBC 0% interest until March 2008. We still have around £1000 left on the card and it will not be clear by the end of the 0% term.

Come April, say we have £500 left and the original debt was £2500. The 0% interest is over and becomes 19.9%

Am i charged from the date the 0% ends so get charged 19.9% interest on £500 or does it backdate and i pay 19.9% interest on the full £2500??

Rimski

I believe it will be on the whole amount ,and backdated .
You should be able to look up the terms of your card online.
Have you thought of a balance transfer to another 0% card.
You may need to pay a balance transfer fee of a couple of % but much better than 19%
Good Luck

bandraoi

You will pay 19.9% on the remaining balance, i.e. £500
That's a monthly interest rate of 1.53%

It's worth balance transferring it if you're going to take more than about another three months to pay it off in full

mark_steps

Hmmmm 2 different answers lol, thanks for the advice. Will try getting another card then...

CLAPTON

you can of course phone up the credit card company to check but all CC 0% deals I've seem only charge you on the amount outstanding when the deal ends (i.e. about 500 in your case.)


If Rimiski knows different perhaps he / she could say which CC.

Of course there are some dodgy deals in certain stores that offer 0% for x months but if you dont pay off in full you get charged a high APR on the entire original amount but they aren't mainstream CC.

Rimski

Oops think it is only on the remaining balance, Sorry to give you heart failure.
Still a good idea to swap to another 0% card.

bandraoi

Before moving it you should play around with the snowball calculator.
Moving it will typically cost 2.5% - 3% of the balance. On £500 that's £12.50 - £15.

If you pay of £150 per month, you'll only have paid £10 by the time you clear the debt in full.

globalds

Remeber if it runs out in March ,they will start charging interest from the day the statement is issued for March ...Not the day the statement has to be paid ..
Somebody will be along shortly if i'm wrong ,but most T&C's changed recently for balance transfers .
The last month is not interest free.

YorkshireBoy

globalds wrote: »

Remeber if it runs out in March ,they will start charging interest from the day the statement is issued for March ...Not the day the statement has to be paid ..
Somebody will be along shortly if i'm wrong ,but most T&C's changed recently for balance transfers .
The last month is not interest free.

I'm aware that what you say is true for MBNA run cards and Capital One (HSBC does not belong to either of them).

Most cards' 0% periods, however, run to a date which is x months from account opening (the most common approach) or BT being actioned, or the first of the month which is x months after account opening (eg Egg).

Best to call HSBC to find out the exact date.

Rimski

Hi, Spoke to friend who works at MBNA, she said that it is as Yorkshireboy says. Sorry for giving you duff info

lon_don

My partnership card's 6-month 0% expired end of november/beginning of december (card activated around mid may, started spending at the same time, last statement date for the 0% is dated mid december) , but I forgot about the "pay whole balance by statement date to avoid interest" rule so paid off whole balance only end of december (payment received by partnership on 31/12/07, the payment due date being early january). I therefore expected to owe interest on the balance between the mid dec statement date and 31/12, so phoned partnership and asked, however was told that I owe no interest. Today I received latest statement dated mid january, with 0 on balance and 0 interest , so it appears indeed that partnership does not charge interest for the last days of the 0% period until the due date (in effect the 0% is slightly longer than 6 months).