A 0% purchase credit card can be a great way of financing big purchases. We explain what they are, what to consider when shopping for the best card, and we list the longest 0% periods on the market.
If used responsibly, a 0% purchase credit card won’t cost you a penny in interest. This is one of the main reasons why these cards appeal to so many people – from home-movers shopping for new furniture to families booking large holidays.
However, it’s key that you use your credit card responsibly and understand the terms attached. So, below we’ve explained:
Looking to reduce your credit card interest? Check out our guide to the best balance transfer cards.
What is a 0% purchase credit card?
A 0% purchase credit card allows you to spend money at no interest over a certain period. Once this period comes to an end, any outstanding balance you still have on your card will be charged at the card’s revert rate of interest.
To understand how this works, consider this example.
An interest-free purchase credit card has a term of 10 months before reverting to an annual interest rate of 27%. After taking this out, you decide to spend £2,000 on some new tech for your home.
Over the next 10 months you make a £200 repayment, effectively paying this purchase off at no interest rate. If, for whatever reason, you have a balance left over after the 10 month period you’ll be charged an annual interest rate of 27%.
When taking out one of these cards it is crucial that you make at least the minimum repayment each month. If you don’t, your provider could end the interest free arrangement.
Why use a purchase credit card?
A 0% purchase credit card is often handy because it can be used as an interest-free loan. If you make sure you pay your balance off in full by the end of the 0% period, then your debt won’t cost a thing.
Of course this makes it the cheapest form of borrowing on the market, with a personal loan or an arranged overdraft coming with interest and potential fees.
0% purchase cards not for you?
That’s okay, these cards aren’t meant to be for everyone. Plus, it’s best you look at all your options first before deciding to apply with one lender.
A great way to start your research is to use our free eligibility checker, which is powered by Creditec. Using whole of market data, it takes your basic information and credit history to find the best cards available for you.
Are 0% purchase terms getting shorter?
According to Defaqto, a data company, interest free cards had much more generous terms before the pandemic.
Some of the best cards in this sector offered interest free periods of 31 months, which is 10 months more than the longest term on the market today.
In addition, consumers were also given a wider choice of providers. There were 25 different credit cards which offered a 0% purchase term of two years or more in 2018. In comparison, today this choice has whittled down to a single card.
This offer is from Tesco Bank, and it’s only available to Clubcard Plus customers who pay a £7.99 fee. It’s this reason why the card doesn’t feature in the best buy tables below.
The best interest free credit cards
If you’re confident that you want to use a 0% purchase credit card, then we’ve listed some of the best options below:
This card could be a great pick if you’re a frequent Tesco shopper. This is because it also offers Clubcard points, the superstore’s reward currency, on all your spending.
Use the card at Tesco and you’ll earn four points for every four pounds spent while spending elsewhere earns four points for every pound spent. Clubcard points work out to £1 cashback for every 100 points, so an £80 shop will earn you 0.80p cashback.
However, bare in mind that this card and its terms are exclusively available to those who subsrcibe to Tesco’s Clubcard Plus scheme. This costs £7.99 a month.
Representative Example: 37.7% APR variable. Based on assumed borrowing of £1,200. Rate of interest 19.9% p.a. (variable).
-
Interest Free Period Purchases:
24 months -
Interest Free Period Balance Transfers:
Not applicable -
APR:
37.7% -
Account Fee:
£0.00
While MBNA advertises an interest-free period of 21 months for purchases and balance transfers, only certain applicants will receive this term. Others will receive a lesser term of 12 months.
Either way, you’ll also be able to make use of its Smart Rewards scheme where you could earn cashback from retailers such as Sainsbury’s and Costa Coffee.
Representative Example: 24.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 24.94% p.a. (variable).
-
Interest Free Period Purchases:
21 months -
Interest Free Period Balance Transfers:
60 days -
APR:
24.9% -
Account Fee:
£0.00
Eight out of 10 customers will receive the advertised 21 month promotional period for this card. The rest will receive a shorter 10 month offer.
Representative Example: 24.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 24.9% p.a. (variable).
-
Interest Free Period Purchases:
21 months -
Interest Free Period Balance Transfers:
60 days -
APR:
24.9% -
Account Fee:
£0.00
As you might expect, this credit card from Sainbury’s Bank comes with a host of Nectar-based rewards. Nectar is Sainbury’s loyalty system, earning shoppers points for purchases made in their supermarkets, Argos, British Airways and other brands. These can later be exchanged for a variety of rewards, such as cashback or Avios points.
So, one of the flagship perks of this card is that you’ll earn three Nectar points for each £2 spent in Sainsbury’s, Argos, Habitat & Tu clothing.
Representative Example: 23.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 23.95% p.a. (variable).
-
Interest Free Period Purchases:
20 months -
Interest Free Period Balance Transfers:
90 days -
APR:
23.9% -
Account Fee:
£0.00
Like TSB, Lloyds Bank is one of the few providers which offers a 0% purchase and a 0% balance transfer period under a single card. This makes it a great choice if you’re shifting debt and you’re expected to spend money in the months ahead. However, a 5% balance transfer fee is one of the more expensive charges, so other cards could be better suited to you.
Representative Example: 24.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 24.94% p.a. (variable).
-
Interest Free Period Purchases:
20 months -
Interest Free Period Balance Transfers:
90 days -
APR:
24.9% -
Account Fee:
£0.00
Should you use a ‘buy now, pay later service’ or a credit card? We explain the difference.
How to get the most from a 0% purchase credit card
Like with all credit cards, make sure to spend within your means on your interest free credit card.
Don’t let it be a reason to rack up significant debt on purchases you could delay for the future, especially as your interest free period approaches an end. Ultimately you don’t want to be caught in a scenario where you’ve run up a significant balance which needs to be serviced at an expensive rate of interest.
If this does happen, then there is a way to cost-effectively service your debt.
What to do if you can’t pay off your debt on a 0% purchase credit card
If you can’t repay your balance in full before the end of your interest free period then it’s best to consider your options. Reverting to your card’s interest rate could be expensive and there might well be cheaper alternatives on the market.
At this stage start investigating the best 0% balance transfer cards on the market. These cards allow you to shift your credit card debt from your current provider to another, with your new card charging no interest for a certain period. This will afford you some more breathing space while you pay off your debt, so make sure you have a plan in place to repay your balance.
In addition, while 0% balance transfer cards offer an interest-free period, many of these cards still charge transfer fees which normally come as a percentage of your debt. Our guide explains what to look out for in more detail.
Read more: How to consolidate credit card debt
Can you do a balance transfer with a 0% purchase card?
Some cards offer a 0% balance transfer period and a 0% purchase period, making them great all-rounder cards. But don’t get drawn in, if your original plan is to shift and pay off your debt on a 0% interest period then stick to it.
What is stoozing?
While it is more common with money transfer cards, some people take out 0% purchase credit cards to do something called stoozing. This is where they spend money on their 0% purchase card and make just the minimum repayments each month. They then use the money they would have used to pay the card off as a monthly deposit into a savings account. Before the interest free period ends, they withdraw their savings to pay off the card and keep the interest.
This scheme only works if you’re confident that you can pay back your debt before the 0% period ends. If not, and you move to a rate of interest, it can quickly become expensive and cost you more than the money you’ve earned in interest.
Read more: How stoozing can help you earn £300 a year on your savings
What to look out for when comparing 0% purchase credit cards
Naturally when you’re looking for one of these cards you’ll want to choose one with the longest 0% purchase period.
You may wish to consider the rate your card reverts to, but because this is variable it’ll most likely change before you get there.
It’s also good to see if your card charges an annual fee.
Can you get a 0% purchase card with bad credit?
While you may be able to get a 0% purchase credit card with poor credit, your choice of card will almost certainly be limited.
In addition, you might find some providers will reduce their 0% term.
For example, take Barclaycard’s Platinum credit card. It advertises a 0% purchase period of up to 21 months, but this won’t be available to everyone. It says that if your credit score isn’t acceptable it may offer you a reduced 0% purchase period of up to 10 months.
So before you apply with one credit card provider make sure you use an eligibility checker to compare what other offers are available on the market.
The Times Money Mentor’s credit card eligibility checker is free and also gives you an understanding of how likely you’ll be accepted for your card.
Read more: How to improve your credit score
FAQs
How long does it take to get my card?
With many providers you’ll know if you’ve been approved for your credit card within a few minutes. After this it usually takes five to 10 business days to receive your card.
Remember, with most cards your 0% period starts the day your account is opened and not when you receive your card.
What are the minimum repayments?
Your minimum repayments on your credit card will depend on your balance. Normally your provider will charge between 2% and 3% of your balance or a set amount – whichever is higher.
How to repay my 0% purchase credit card
Setting up a Direct Debit is an effective way to pay off your credit card debt. That way your repayments become part of your budget and you won’t be tempted to use it on other discretionary spending.
Should I withdraw cash on my credit card?
If you can avoid it, don’t withdraw cash on your interest free credit card. This incurs additional charges and there may well be more cost-effective options available.
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
