0% Purchase Credit Cards Can Help You Beat VAT Increases

0% Purchase Credit Cards Can Help You Beat VAT Increases

If you are planning to invest in big-ticket items, it is strongly recommended that you do so before the Value Added Tax (VAT) rate increases from 17.5 per cent to 20 per cent on 04/01/11.

While the sound of an increase of 2.5 percent may not seem high, this VAT increase could potentially result in price increases of as much as 10 per cent after factoring in the multi-stage process of manufacturing.

With VAT rate increases affecting the purchase of raw materials and components needed to assemble products, those buying the finished product will notice a much higher out-of-pocket cost.

In order to avoid this, many financial experts are recommending that consumers begin applying for 0% purchase cards to make their larger purchases before the holiday season.

With interest free credit cards, you can buy your merchandise now, pay the cost of the goods off during the 0% offer (which will run after the VAT increase date) and therefore avoid the VAT rate increase on those purchases.

Credit cards with a 0% interest rate introductory offers can be very beneficial during the holiday season. While you must spend wisely, these credit cards give you the funds you need now without charging you exorbitant interest rates.

Plus, if you successfully pay off the big-ticket items before the interest kicks in, you will only pay the purchase price of item as if you had paid cash initially.

With the VAT rate increase, purchases of 2,000 could cost up to 200 more in 2011. If you add in interest of 15 percent, you are essentially paying 2,530 for something that costs 2,000 if you pay at the time of purchase.

By applying for a 0% credit card now, you will avoid the 200 increase from the VAT rate increase and the 330 of interest assuming you pay all of your repayments on time and pay off your credit card balance before your 0% offer expires.

Make a wise choice when managing your money and find away around being hit hard in the wallet by for the VAT change.

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