How to Compare 0% Purchase Credit Cards: part 2
0% Purchase Best Buys
0% Purchase FAQ's
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0% purchase credit cards offer a great way to 'buy now and pay later' - with 0% interest rates on your spending for up to 12 months.
There is a fair range of 0% purchase credit cards to choose from, and whilst the length of the 0% deal is the main consideration there are other factors to consider too.
The following information will help to guide you through the questions you need to be asking when comparing 0% purchase credit cards.
What to look for...
- The longest 0% purchase period
When selecting a 0% purchase credit card the main consideration should be the length of the 0% purchase period.
The longer this offer period, the longer you will have to enjoy 0% interest rates.
The credit cards currently offering the longest 0% purchase periods are HSBC credit card at 12 months and the Capital One Platinum credit card at 9 months.
- Do you also want to transfer a balance?
If you also want to transfer a balance to a 0% credit card, it's very important to choose a 0% credit card that offers a 0% rate on both balance transfers and purchases for the same length of time.
See 0% balance transfer and purchase credit cards here.
Alternatively, for a wider selection of cards and to get longer 0% deals - it may be worth simply getting one credit card for your purchases and another for your balance transfer.
- The standard interest rate after the introductory period
Once the 0% purchase period has ended any remaining balance, or future use of your credit card will be charged at the standard interest rate.
It's a good idea to look at the APR of each 0% purchase credit card - this will let you know what the standard interest rate is that you will be charged at the end of the 0% introductory period.
- Additional rewards
Whilst not an initial concern when selecting your 0% purchase credit card, additional rewards can be considered as an 'added extra'.
Rewards available can include things like cash back, reward points, flyer miles, charity donations and shopping vouchers or discounts.
What to watch out for...
- Unsuitability for balance transfers
If a 0% purchase credit card is suitable for balance transfers as well as spending, it will offer 0% rates on both balance transfers and purchases for the same length of time.
The unsuitability of using a 0% credit card for both transferring a balance to and spending on arises due to the way card issuer's allocate payments you make to your account.
When you make a payment to your credit card there is an order in which the payment will be applied, and it's usually first to 0% or cheaper balances and then to standard and higher rate balances.
Due to these allocation of payments, spending on a 0% credit card can sometimes become 'trapped' behind cheap balance transfer debts where it will accrue interest charges until the cheaper balance transfer is repaid in full.
Unfortunately, 'unsuitable' 0% offers tend to bring in more profit for the credit card companies, so there aren't many of these offers left. It may be worth taking out a seperate 0% balance transfer credit card to clear up any existing credit or store card debts.
If you really only want one credit card you can see suitable 0% balance transfer and purchase credit cards here.
Don't forget!
- No interest doesn't mean no payments!
0% interest doesn't mean no payments.
When using a 0% credit card it's very important to always make at least the minimum monthly payment each month.
If you don't, your 0% offer may vanish quicker than your packet of Rolos - and be replaced with a costly standard interest rate.
- Don't exceed your credit limit
Likewise to missing a payment, exceeding your credit limit is another default that could cost you your 0% deal.
- Know when your 0% period ends
Know when your 0% period ends and set a date in your diary.
Try to repay as much as you can comfortably afford to each month so that you can clear your 0% spending before the end of the introductory period.
- Avoid cash transactions
Cash transactions should be avoided like the plague on any 0% credit card.
Aside from the higher interest rates and handling fees cash transactions carry, they will always become trapped behind any 0% balance, languishing in the realms of high interest hell until you have first repaid all of your 0% spending (and / or balance transfer) in full.
Credit card companies can be sneaky so and so's, and many 'purchase' transactions can also be classed as cash. The main ones to watch out for are:
- ATM withdrawals
- Getting 'cash back' at a shop or bank
- Buying foreign currency or traveller's cheques
- Gambling - and any purchase made at a casino or gambling establishment
- Buying shopping or money vouchers
- Bill payments.
Remember, use your debit card for getting at cash!
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Compare 0% purchase credit cards
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