Help me understand 0%

[OneDayAtATimex]

I'm a regular but have name changed as I don't want my other posts to link to this one but I'd appreciate any help.

I have a poor credit rating - I'll be completely honest, due to falling into the raving scene in my late teens (I'm not 26) and blowing a lot of it on coke and god knows what.

Thankfully, I grew up, got a half decent job with career prospects and I'm now earning £27k plus £5k annual bonus. I've slowly started to build my credit back with a Vanquis card which I pay off in full each month.

I will have a particularly expensive January and want to try out a 0% card. It's DP's birthday, we're going on holiday and my car needs new breaks.

I can apply for a 0% card for 25 months. Does this really mean I don't pay any interest if I pay it off without 25 months?

Yep! The way these work is that they rely on people not paying it off in those 25 months when they'll make the money

Just ensure you have DD of a certain amount so you pay off the full amount in the 25 months!

I have a few haha

Yes it does. You need to pay the minimum payment on time, every month and stay within your credit limit or they might withdraw the offer. But as long as you do that, you don’t pay interest for the first 25 months.

Are you sure you are eligible though? They aren’t often given to people with poor credit ratings so your must not be as bad as you think if you have been offered the deal.

Yes that’s what it means. Don’t fall into the trap of adding more and more to the card though because you know you have so many months to still pay it off. Use it for what you need, cut it up and pretend it doesn’t exist.

Yes but please watch out for the fees!
These cards used to be interest free and charge free but I’m not sure they are nowadays.

Yes, but please be careful. If you make multiple 0% transfers that expire at different times it can become difficult keeping track.

I’m currently in a complete pickle because I have a £1000 0% deal expiring in January but my credit card are applying any payments I make trying to pay it off to a 0% deal that doesn’t expire until June. Because of this I’m going to end up paying interest.

The feeling of using a 0% card not incurring interest also lured me into living slightly beyond my means as I had spare financial capacity on the card. This was never my plan but when my circumstances went downhill it was just too easy to think ‘oh it won’t hurt to buy xyz and balance transfer to my 0% card as I know my situation will have improved by the time it expires'. It just didn't work out like this...