55 day interest free mastercard

[peterj]

I am 22 and i need a credit rating. I am purchasing an investment property shortly and need to show the bank i can make my repayments in a kindly fashion. This card i think suits me.

A great everyday card.

0% p.a. on purchases for the first 5 months from when your account is opened (special promotion for a limited time)*
Annual fee: $30 (waived for the first year and ongoing when you make purchases of at least $10,000 pa.)
Interest rate: 17.74% pa for purchases, 19.99% pa for cash advances
Up to 55 days interest free on credit purchases where your closing balance (including any balance transfer amount or other promotional amount) is paid in full by the due date each month1

One question i do have, the first 5 months 0%p.a how can they afford to do that? Is there some catch?

I would use the card for small purcashes only like petrol and pay it back straight away.

[disneysteve]

One question i do have, the first 5 months 0%p.a how can they afford to do that? Is there some catch?

The catch is that they know a certain percentage of users won't repay their balance before the promo period ends and then their rate will jack up to almost 18%.

Also, keep in mind that the card company makes money on every purchase in the form of merchant fees, even if you pay the bill in full.

It is very common to offer 0% for some period of time to new users. It costs them a lot more to get a new customer than to keep an existing customer.

[peterj]

so basically i can not pay my bill on time for 5 months and be charged nothing?

[Joan.of.the.Arch]

Each month there will be minimum payments based on how much you owe. You have to make at least those minimum payments on time each month. By the end of the 5 month period, if you have not paid off everything you have charged, then interest will be added.

Here in the USA, there are still many CC cards that charge no annual fee. Perhaps they can be found where you live.

Have you thought about whether you would even be able to charge $10,000 per year? It sounds (from a previous post) as if you live on little right now. Maybe the kinds of expense you do have cannot be put on credit card. That is the case for me. Utilities, mortgage, health insurance....oh some I could put on CC, but I would have to pay a fee of something like $6 for every bill so paid, in which case I would have been better off not using the CC!

[disneysteve]

I generally agree with not paying an annual fee if it can be avoided. If you have a short credit history, you may not be able to get a card without a fee and $30 isn't too bad. With all the banking and credit problems, I think annual fees are going to make a comeback and we're going to see more of them. They used to be quite standard.

It probably doesn't apply here, but just for general knowledge, some credit cards charge an annual fee but give you something in return. I have a Marriott Visa and I pay $65/year but each year on the anniversary of my account, I get a certificate for one free night at up to a category 5 hotel. A cat. 5 hotel is typically in the $250-$300/night range. So I happily pay my $65 and once a year, my wife and I get to do a luxury get-away weekend trip.