What is an interest free credit card?
What are 0% Purchases credit cards?
A Zero Purchases credit card allows you to buy things on your card without attracting interest. This 0% period will be for a limited time (usually between 3 and 28 months). After that, you start accruing interest on the debt left on the card, and all future purchases.
How does a 0% Purchases credit card work?
Interest free credit cards allow you to make purchases without attracting interest for a set length of time (usually up to 28 months). They can be cheaper than other forms of borrowing for purchases such as a holiday or car, but only if you pay off the balance in full before the end of the interest free period. If you don’t pay the full balance before the interest free period ends, then the remaining amount begins to attract interest at the rate stated by the provider.
Should I get a 0% Interest Purchase credit card?
Before you decide to get an interest free credit card, consider your circumstances and spending habits first. When used well, interest free Purchases credit cards can be cheaper than a loan for one-off large purchases (whether that be a new fridge-freezer or a holiday). However, spending more than you can afford or not paying off your credit card in full and on time could mean you end up in more debt, and could negatively affect your credit rating.
What must I avoid when using an interest free credit card?
As with every credit card, never use it to draw out cash from a cash machine. A cash advance on credit cards usually attracts huge fees and interest, and could impact your credit rating, as borrowing money in this way could indicate to lenders that you are poor at managing your money. Also, as with all forms of credit, be careful not to miss any monthly payments, as this could attract financial penalties, and your lender can even demand that you repay the balance in full immediately, with a noticeable impact on your credit score. And remember, once the interest free period is up, your card balance and any further purchases will start to accrue interest at the card provider’s standard rate.
How do I choose the best Zero Purchases credit card?
You can use a trusted comparison site, such as Must Compare, to find out which cards are offering 0% Interest, and compare the latest deals and offers. Check details such as any fees, minimum repayments, standard interest rates and the Representative APR before applying to prevent a costly mistake. Always do your research - some lenders will allow you to check your eligibility before you apply, performing a “soft” credit check, meaning you can have more confidence when applying. If you’re unsure about your credit score, take a look at our guide to credit scores before proceeding with a full application.