What Happens At The End Of The 0% Interest Purchases Period?

Featured Low Interest Rate Card

The St.George Vertigo MasterCard is low on purchase interest rates but scores high on shopping value. What makes St.George Vertigo MasterCard more amazing is the low annual fee making it accessible to more people.

• $55 annual fee
• 12.49% p.a. on purchases
• 2.99% p.a. for 6 months on balance transfers
• Cash Advance Rate of 21.24%
• Enjoy up to 55 days interest free on purchases

Click here to read the St George Vertigo terms and conditions

0% purchase credit cards offer the opportunity to make purchases at 0% for a certain amount of time before the regular rate of interest kicks in. It is important to understand that this is what happens, and not think that this offer is ongoing.

The usual term for this introductory period is six months, and it may run concurrently with a 0% balance transfer offer. As with all introductory offers, they come to an end.

There are a few important issues to grasp. Firstly, you need to know what the regular rate of interest (APR) is once the offer period expires. This is the rate of interest that will affect any balance remaining on the credit card, and any future purchases made on it. This could be higher than average to compensate the credit card provider for the generous offer they are making. Some people may be mistaken in thinking that the purchases they make within the offer period remain at 0% in perpetuity, and only subsequent purchases are hit by the higher regular rate. This could be an expensive misconception.

The golden rule:

Your aim must be to pay off your debt within the offer period so that you can start a new slate when the regular rate takes over. After that, you should obviously always try to clear your balance every month, because this is the key to having a successful relationship with your credit card. A 0% rate on purchases should never be seen as an invitation to go a little loopy on the high street or on the internet. A lot of damage can be done in six months, and it can take many more months, if not years, to undo that damage. If you are building up a debt on your 0% purchases card because you are only paying the minimum amount each month, you must be setting aside enough funds to clear that debt before the offer comes to an end. Remember that paying just the minimum amount of the balance is never a good habit to get into. The only reason this may have to be the case is if you’ve got your card with the purpose of making a large and necessary purchase which you know you will not have the full funds to cover straight away.

Stoozing:

Used cleverly, it is possible to even make a little money with this type of 0% card, through something called “stoozing“. This is the practice of making purchases on the 0% purchases credit card and putting the cash you would have spent into a high interest account, therefore earning yourself interest instead of paying it out. This requires discipline to achieve, and you must make certain that you keep a running total of your purchases and set aside the equivalent amount to be able to clear the debt when the time is due.

• Comparison of Top 10 Credit Card Offers

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0