How to Compare 0% Purchase Credit Cards
0% Purchase Best Buys
0% Purchase FAQ's
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The credit card market is booming, and the number of 0% deals to lure in new customers can be overwhelming - especially when you're trying to choose the best one!
Follow our guide to comparing 0% purchase credit cards to find out what these cards really offer and what you need to look for - as well as watch out for - when deciding upon the best 0% purchase credit card for you.
These cards are best for...
- Large initial purchase now
0% purchase credit cards can be used like free credit - just like a 'buy now, pay later' deal from your local sofa shop.
If you are looking to splash out on a large purchase in the not too distant future, a 0% purchase credit card would allow you to spread the cost over the coming months without being charged any interest.
- Continuous spending
0% purchase credit cards can also be used for continuous spending, as the 0% period will apply to any purchase made throughout the introductory period.
However, it is important to bear in mind that if you run up a big debt from spending the standard interest rates after the initial 0% period could be costly, and you should therefore try to repay your spending before the standard rate kicks in.
These cards are not suitable for...
- Cash transactions
0% deals never include cash transactions, and 0% purchase credit cards are no exception.
The bigger problem involved with using a 0% purchase credit card for cash transactions is that card issuer's will generally always allocate your payments to 0% or lower rate balances first, leaving any cash transactions to accrue interest charges until you have first repaid all of your 0% purchase balance.
Remember, cash transactions include ATM withdrawals, getting 'cash back' at the supermarket - or any other retail outlet or bank, buying foreign currency or traveller's cheques and also gambling transactions.
Knowing what's on offer...
As with any financial product it's important to know exactly what is on offer, and what isn't on offer so that you know how to best use the product you've taken out.
- What the 0% purchase period entails
0% purchase periods are basically joining incentives to lure new customers to take out a credit card.
0% purchase periods offer a 0% interest rate on purchases for an introductory period of time, which can be anything from 3 months to 1 year depending upon the card chosen.
Once the initial introductory period has ended, balances remaining on the card, and any future card use, will be subject to standard interest rates, which are on average around 15.9% p.a.
- What is included in the 0% purchase offer?
0% purchase credit cards offer a 0% interest rate on card purchases.
Card purchases are transactions made with your card for goods or services from retailers or companies.
A card purchase would be transactions such as buying a new TV from Dixons, paying for your broadband subscription or buying your xmas shopping on Amazon.
- What is not included in the 0% offer?
0% offers never include cash transactions. That is, withdrawing cash from an ATM machine, getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques. They can also include gambling transactions and any transaction made at a gambling establishment (e.g. a casino), bill payments, buying shopping or money vouchers, bill payments and money transfers.
0% purchase credit cards do not include balance transfers as part of the 0% purchase deal, although some also offer a seperate 0% balance transfer deal.
However, it's important to remember that credit cards offering 0% deals on purchases and balance transfers do so as separate entities - so a 0% purchase deal does not include balance transfers, but the same credit card may also offer a 0% balance transfer deal.
- Transferring a balance too
If you are looking to transfer a balance to a 0% credit card and spend on the same card it's important to get the right 0% credit card for your usage.
For a 0% credit card to be suitable for both balance transfers and purchases it must offer a simultaneous 0% deal on both balance transfers and purchases that lasts for the same length of time.
The reason many credit cards are not suitable for both is due to the way card issuers allocate payments that you make to your account. Payments will usually always be applied to 0% or the cheapest balances first, and only when these are fully repaid will your payments start reducing the balance on any standard or higher rate balances.
When one 0% deal expires before another 0% deal - the first balance will then become a higher rate balance to the second - and become unrepayable until the cheaper balance is repaid first.
You can compare 0% balance transfer and purchase credit cards that are suitable to use for both balance transfers and new purchases. However, these cards are becoming rarer and it can be more advantageous to simply take out a 0% purchase credit card for spending and a seperate 0% balance transfer credit card for transferring existing card debts to - namely because you'll have a wider choice of cards and be able to enjoy much longer 0% offers.
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Compare 0% purchase credit cards
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