13 min Read
10 Sep 2019

Written by Liam

Over 30 years experience in financial services, residential lettings and property sales. Director of a leading national estate agency chain, until leaving in 2008 to pursue other commercial interests. Vast experience in new business development, business change, management development and business strategy.

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Compare the Best 0% purchase credit cards

Best 0% purchase credit cardsWhat is a 0% interest purchase credit card and how does it work?

A 0% purchase credit card is similar to an ordinary credit card but there is no interest charged on purchases for an initial period of time set by the card provider. Interest, however, may still be charged on cash withdrawals, balance transfers and transaction made abroad.

The period within which no interest will be paid is set by the credit card provider, currently the maximum interest-free period available is 27 months. When applying for a 0% interest purchase credit card your financial circumstances will be assessed and this will determine whether you are offered the advertised interest-free period, a reduced period or your application rejected. It is important therefore to make sure you have your finances in order prior to making an application.

Be aware that credit card providers are not in the habit of lending you money for free. They are fully aware that most people do not pay off the full outstanding balance each month and so they are confident that they will be charging you interest in the long term. To avoid this, make sure you pay off your balance in full every month or prior to the end of the interest-free period.

What are the best 0% interest purchase credit cards?

When trying to access which is the best 0% interest purchase credit cards there are 3 areas you need to consider.

  • The length of the interest-free period
  • The potential interest rate at the end of this period
  • Whether there are any account charges levied

Having completed a full review of the 0% purchase credit cards here is my top 5 selection.

PROVIDER INTEREST-FREE PERIOD (months) APR (after interest-free period) ACCOUNT FEE REWARDS Minimum Payment
MBNA up to 27* 20.9% to 27.9%* NO None Greater of £25 or 1% of balance
YORKSHIRE/CLYDESDALE 26 18.90% NO Mastercard Priceless Cities rewards scheme Greater of £5 or 1% of balance
TESCO BANK 26, 20 or 14* 19.9% to 26.9% * NO Collect Tesco Clubcard points on purchases Greater of £25 or 1% of balance
BARCLAYCARD up to 25* 19.9% to 29.9%* NO Savings on live events with Barclaycard Entertainment Greater of £5 or 2.5% of balance
SAINSBURY'S BANK 17, 21 or 25* 20.90% NO Collect Nectar points on purchases Greater of £5 or 1% of balance

* dependent on personal circumstances of the applicant

 

card image     MBNA

    • 0% interest on new purchases for a maximum of 27 months or 15 months depending on personal circumstances
    • 0% only applies to purchases made in the first 60 days of account opening.
    • 0% interest for up to 27 months on balance transfers, interest currently 20.9% or 27.9% APR after interest-free period depending on the personal circumstances of the applicant.
    • No interest-free period for cash advances, interest rate currently 20.9% or 27.9% APR depending on personal circumstances
    • No annual fee
    • No interest will be charged on new purchases if you pay the statement balance in full and before the end of the offer period. If not repaid in full, interest will be charged from the date of purchase until date of full repayment.
    • A charge of £12.00 will be levied if you do not make at least your minimum payment by the payment due date requested on your statement. You will lose your interest-free period and the standard interest rates for the applicable transactions will apply.

 

     Yorkshire/Clyesdale Bank

  • 0% interest on new purchases for a maximum of 26 months from date account is opened. Interest rate currently 18.9% APR after the interest-free period
  • 0% interest on balance transfers for 12 months from account opening only, interest rate currently 11.9% APR after the interest-free period
  • No interest-free period for cash advances, interest rate currently 27.9% APR
  • No annual fee
  • No interest will be charged on new purchases if you pay the statement balance in full and on time. If not repaid in full and on time interest will be charged from the date the transaction was debited to the account until date of full repayment.
  • If you default on payments in the introductory period you will lose the benefit of the introductory rate and your account will incur interest at the current rate on the outstanding balance.
  • Benefit from Mastercard Priceless Cities reward scheme

 

      Tesco Bank 

  • 0% interest for 26, 20 or 14 months from the date account is opened depending on your individual circumstances. Interest rate currently 19.9% to 26.9% APR after the interest-free period depending on your individual circumstances.
  • 0% interest for balance transfers for up to 3 months, interest rate currently 21.8% to 30.5% APR after interest-free period depending on your personal circumstances.
  • No interest-free period for cash advances, interest rate currently 24.9% to 32.9% APR depending on your personal circumstances.
  • No annual fee
  • No interest will be charged on new purchases if you pay the statement balance in full and before the end of the offer period. If the account is not fully cleared, interest will be charged on the average daily balance until full payment is made.
  • If you default on payments in the introductory period a fee of £12 you will lose the benefit of the introductory rate and your account will incur interest at the current rate on the outstanding balance.
  • Collect Tesco Clubcard points on purchases.

 

      Barclaycard

  • 0% interest for up to 27 months from the date account is opened, depending on your personal circumstances. Interest rate currently 19.9% to 29.9% APR after interest-free period depending on your personal circumstances.
  • 0% interest on balance transfers made within 60 days of account opening, interest rate currently 19.9% to 29.9% APR  after interest-free period depending on your personal circumstances.
  • No interest-free period for cash advances, interest rate currently 24.9% APR
  • No annual fee
  • No interest will be charged on new purchases if you pay the statement balance in full and before the end of the offer period. If not repaid in full, interest will be charged from the date of purchase until date of full repayment.
  • Benefit from savings on live events with Barclaycard Entertainment.

 

Image result for sainsbury's credit card    Sainsbury's Bank

  • 0% interest for up to 25 months from the date of the account opening, depending on your personal circumstances. Interest rate currently 20.9% to 28.9% APR depending on your personal circumstances.
  • 0% interest for up 25 months on balance transfer, interest currently 20.9% to 28.9% APR  depending on your personal circumstances.
  • No interest-free period for cash advances, interest rate currently 25.9% to 28.9% APR depending on your personal circumstances.
  • No annual fee
  • No interest will be charged on new purchases if you pay the statement balance in full and before the end of the offer period. If not repaid in full, interest will be charged from the date of purchase until date of full repayment.
  • Collect Nectar points on purchases

Advantages of a 0% purchase credit card

0% credit cards can be very useful particularly when purchasing more expensive items such as a holiday or large items for your home. If you make sure that the balance is paid off in full before the interest-free period ends you can have access to free money for up to 27 months.

If you have an outstanding balance on an existing credit card, transferring the balance to a 0% credit card will allow you to clear the debt quicker as no interest will be charged for a period of time, although you will usually have to pay a fee of around 2.5%.

Things to consider before opening a 0% purchase credit card

Carefully consider your financial circumstances before applying for any credit card. Getting caught up in the excitement of a pending holiday or a new purchase can cloud your judgement and leave you struggling to clear the debt.

Although a 0% credit card will give you an interest-free period on purchases, it is vitally important that you clear the outstanding debt before the end of this period to avoid getting caught up in a debt spiral.

The advertised conditions, such as the interest-free period, are all subject to your personal circumstances and you may be offered less if your personal finances are not in good shape.

Any application will be subject to a credit score so make sure you check this prior to applying.

0% purchase credit card vs personal loan

0% credit cards are a flexible way of borrowing money over a short period as long as you clear the amount owed every month or within the interest-free period. However, there is a great temptation to keep using your credit card for small everyday purchases allowing the balance to grow over time, incurring high-interest charges.

Personal loans are a more structured way of borrowing money with a set repayment period and interest rate. Interest rates on loans tend to be lower than with credit cards but obviously with a 0% credit card you can take advantage of the interest-free period to clear your debt without incurring any interest charges.

0% purchase credit card FAQs

How much can I save using a 0% purchase credit card?

How much you could save with a 0% credit card will depend on how much you borrow but here is an example showing the potential savings.

0% credit card Standard credit card
Interest rate 0% 18.90%
Amount borrowed £1,000 £1,000
Fixed monthly repayment £50 £50
Repayment term 20 months 24 months
Interest paid NIL £190

 

Can I transfer a loan onto a 0% purchase card?

It is unlikely that you will be able to transfer a loan directly to a credit card. However, it may be possible to pay off the balance of a loan with a credit card but you should be aware of the following issues.

  • Is there a redemption penalty for paying off the loan early
  • Are you be able to clear the balance on the credit card before the interest-free period expires, if not you may be incurring a higher interest rate than on the original loan

How do I pay off a 0% credit card?

As with any debt, it is advisable to pay it off as quickly as possible. If you can't pay the balance off every month always make sure you pay more than the minimum amount. It's advisable to pay a fixed amount every month as this will reduce the debt quicker.

What happens when the interest-free period ends?

At the end of the interest-free period, the interest rate charged will be at the current rate for the card. This may be higher or lower than the rate advertised on application.

Can I use a 0% credit card for balance transfers?

Most 0% credit cards allow balance transfers but there may be certain restrictions so make sure you check the T&Cs fully

 

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