How Do 0% Balance Transfer and Purchase Credit Cards Work?

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0% balance transfer and purchase credit cards offer a way to clear up any existing credit card debts, whilst also being able to use your new card for purchase spending.

What makes them different from 0% balance transfer credit cards?

The majority of 0% balance transfer credit cards, even those that also offer a 0% purchase period, are generally unsuitable for both transferring a balance and using the card to pay for purchases.

0% balance transfer and purchase credit cards are suitable for both transferring and spending. This is because the 0% deals they offer run simultaneously to each other for the same length of time.

What makes a normal 0% balance transfer credit card unsuitable for spending?

Credit card companies like to try and make money out of us everyway they possibly can, and 0% balance transfer credit cards can be pretty sneaky in their attempts to trap non-balance transfer transactions into high interest charges.

When you make a payment to a 0% balance transfer credit card, the majority of card issuers will allocate this payment to lower or 0% balances before any higher rate balances, like purchases or cash withdrawals.

So if you spend on a 0% balance transfer credit card these transactions will get 'trapped' and remain unpaid, accruing interest charges until you have first repaid all of your 0% balance transfer first.

Similarly, when a 0% balance transfer credit card offers a shorter 0% purchase period, if you spend on the card, any purchases left on your account after the 0% purchase period will be moved to the standard interest rate, where again, they will remain unpaid until you have first cleared your 0% balance.

Some credit cards will even allocate payments first to the longest 0% period, so you won't even have half a chance to repay any purchases before the shorter 0% purchase period ends.

The solution for balance transferring and purchase spending!

Aside from just getting a credit card for your balance transfer and another credit card for your purchase spending, there is a solution that comes neatly packaged as just 1 piece of plastic.

0% balance transfer and purchase credit cards offer a 0% interest rate on both your balance transfer and any purchases you make for the same length of time.

Because the 0% deals are of equal length, there's no possibility of your spending getting caught in unwanted interest charges while you struggle to quickly repay your 0% balance transfer.

What can you use these cards for?

0% balance transfer and purchase credit cards can be used to clear up existing credit card debt that you may already be paying hefty interest charges on, whilst also getting a new credit card to spend on and enjoy a 0% period on your purchases too.

These credit cards are really the only credit cards that are suitable for balance transferring and purchase spending.

What's more, you get to enjoy a, sometimes lengthy, interest free period on both balances.

How long do you have?

0% balance transfer and purchase credit cards can be just as competitive as sole-use 0% balance transfer credit cards.

While you won't find the longest 0% balance transfer deal on these cards, you can still enjoy 0% periods for up to 9 months - and that will be on both your balance transfer and purchases.

The current longest combined 0% offers can be found on the Capital One Platinum credit card (9 months).

What happens after the introductory period ends?

When the introductory period ends, as with any 0% introductory rate credit card, if you still have a balance remaining on your credit card you can always transfer the whole balance to a new 0% credit card deal.

However, it is always advisable to try and repay your balance transfer and any purchases you've bought before the end of the 0% period.

What you need to be aware of

- Balance transfer fees
As with any other 0% balance transfer deal, transfer handling fees are almost impossible to avoid these days.

Transferring a balance to a 0% balance transfer and purchase credit card is likely to carry a handling fee.

Whilst this fee is only a small percentage of the balance you are transferring, and will be much less than the money you'll save in interest costs, it's worth knowing how much it will be so you don't get a nasty surprise.

- Cash withdrawals
0% balance transfer and purchase credit cards are great for balance transferring and purchase spending. However, like any other 0% deal - and most other credit cards too - cash withdrawals should be avoided at all costs.

Not only do cash withdrawals tend to carry handling fees and much higher rates of interest than the standard quoted 'APR', but they will also get trapped, accruing hefty interest charges, becoming un-repayable until you have first repaid all of your 0% debts.

- The end of the 0% period
It's important to remember that 0% periods do end, and whilst you can spend as you like on your new 0% balance transfer and purchase credit card, you should bear in mind that any 0% period should be used wisely.

Keep an eye on your spending, and try to repay your credit card balance before the 0% period ends and the standard interest rate kicks in.

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