Meaning of zero % on all purchase for 22 months

  • sksahoo's Avatar
    Hi,I am bit new to credit cards and sorry for asking a basic question. My question is about the 0% interest on all purchases upto 22months.1.Does this mean that upto 22 months I just have to pay the minimum amount due for every month and I will not pay any interest on the outstanding balance?2.Does the purchase include all online and offline purchase?Thanks
  • 8 Replies

  • StephenH's Avatar
    Employee
    Hi ,

    Thanks for your contribution to The Community.

    You're correct that you will be required to pay the minimum payment every month to avoid interest being charged along with any late payment fees. Please also note that only paying your minimum payment can be expensive in the long run and mean it will take longer to clear your balance.

    The 0% offer includes any purchases (either online or offline) during the term that was agreed.

    Hope this helps.

    Thanks,

    Stephen - Customer Care
  • sksahoo's Avatar
    Thanks for the reply Stephen I didn't understand what you mean by this"Please also note that only paying your minimum payment can be expensive in the long run and mean it will take longer to clear your balance"Thanks
  • chaddman30's Avatar
    Supervisor
    What Stephen is saying is this: if, after 22 months, you've a large outstanding balance then only ever making the Minimum Payments will mean it'll take you years to clear the amount borrowed. Example: Pay less interest with larger monthly repayments
    The example below assumes the following:
    • £1000 purchase is added to your account on the 1st of the month and no further transactions made
    • Minimum payment is made each month on payment due date
    • Standard Rate (18.9% p.a.) is charged
    • Calculation includes any introductory rate on purchases.
    • Credit limit is not exceeded
    You pay the minimum every monthYou pay £50 every monthYou pay £100 every monthInterest charged in 1st year£75.96£56.55£23.41Interest charged in 2nd year£138.87£46.37-Time it will take to pay off the balance18 years 2 months2 years 1 month1 year 1 month

  • sksahoo's Avatar
    Hey Thanks for the reply, but again I got more confused. I have an zero percent interest for 22 months, so why did you say that You pay the minimum every monthYou pay £50 every monthYou pay £100 every monthInterest charged in 1st year£75.96£56.55£23.41 As I understand that if I do the minimum payment every month then for first 22 months, I will not be charged any interest. Then why you siad that I have to pay a 75.96 interest
  • VanessaM3's Avatar
    Employee
    Hi 

    For the first 22 months you have your Credit Card with Tesco Bank you will not be charged interest as it is 0%. If after the 22 months you still have an outstanding balance on the Credit Card you will be charged interest.

    If you pay the minimum amount each month, again you will still not be charged interest. However if you fail to pay at least the minimum payment each month then interest will be applied even if it is within the first 22 months.

    As my colleague Stephen mentioned previously, if you only pay the minimum amount each month it will take longer to pay off your Credit Card balance.

    Hope this helps,

    Vanessa - Customer Care
  • chaddman30's Avatar
    Supervisor
    I didn't mean to confuse you. I merely found a sample Summary Box which shows why you are advised to avoid only ever meeting the Minimum Payment. Based on that example it'd take 18 years (!) to settle the debt.
  • sksahoo's Avatar
    I am thankfull for your comments. I know you were trying to explain me but I am just new to credit card and couldnt understand.