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0% interest rate on major credit cards

My friend got a major credit card with a one year 0% annual percentage rate for the first year on all purchases. I told her to watch because once that one year is up and the things you haven't paid for yet, the new apr applies to those things. But she seems to think if she's purchases a month before it ends, she won't have to pay the interest when the next month hits. I know on store credit cards like walmart has that if you don't pay in 12 months, the interest will apply from the date of purchase, same with lowes being 6 months, they state this very specifically, but I can't find anything on major credit cards stating what I think. Does anybody know exactly?

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Asked by Anonymous at 12:19 AM on Jan. 5, 2011 in Money & Work

Answers (6)
  • My understanding is that the interest will be charged on the balance carried over from the previous month. However, with some store cards, yes, it will go back to the original date of purchase. She should still have the credit card agreement, or she can request one from them if she doesn't still have it. Also, the interest rate could be 30% or more, so she should be aware of that.

    Answer by musicpisces at 12:25 AM on Jan. 5, 2011

  • She needs to read the fine print. I've seen both-- and the vast majority I've seen, the interest rate applies to the ORINGINAL LOAN AMOUNT -- meaning from the date she got the card. So even if she's paid off 95%, she may owe interest on the total amount. It's a nasty trick, but they're getting away with it!!

    She can call the credit card company and have them explain it to her as well.

    Good luck!

    Answer by Busimommi at 12:32 AM on Jan. 5, 2011

  • She will need to read the fine print. Some of them are zero interest on all purchases made during that time frame regardless of when you pay it off as long as you pay on time and at least the minimum payment.

    Most aren't.

    There are also those that are 0% unless she charges something after the promotional period.

    You can check the major credit cards website under the name of the card. Like there are different types of cards by American Express- so just because you have American Express it doesn't meant he terms and conditions are the same for everyone holding that card. Hope that makes sense.

    Answer by Erica_Smerica at 1:39 AM on Jan. 5, 2011

  • She can see it in the statement. It says if you don't pay the full amount by such day, you will have to pay such amount...GL girl

    Answer by bratgirln1 at 2:57 AM on Jan. 5, 2011

  • It depends on the card. I have one that is 0% on any balance incurred during the first 12 months. The 0% remains until that original balance is gone. There are others where it's no interest charged for the first 12 months, then interest starts being charged. There is also a program where interest is actually accrued during those first 12 months, then ALL of it is charged after that first year if the balance isn't paid off.

    You have to be really careful with offers like that one - the fine print can be really confusing.

    Answer by Scuba at 8:19 AM on Jan. 5, 2011

  • Cut up the damn thing! The interest will be charged from the date she opened the card, in addition to any purchases she has made during the year.

    Answer by tasches at 1:31 PM on Jan. 5, 2011

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