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0% purchase credit cards offer a zero percent interest rate on purchase spending for the duration of the 0% period.
Unlike 0% balance transfers however, which offer a window period in which to move your balance to qualify for the 0% rate for the next so many months - 0% purchase credit card offers allow you to make 0%-qualified purchases throughout the entire promotional period.
Spending right up until the final hour isn't an exceptionally good idea though - as you should aim to repay all - or as much as you can - of your spending before the 0% purchase period ends.
The reason is that when the 0% purchase period does end - what happens is any purchase balance remaining on your account will revert to the standard interest rate - which is on average around 16.9% per annum.
From then on in - any spending made on the credit card will be charged at the standard interest rate - unless you repay your balance in full and within the standard interest free period - which is typically around 56 days from the first day of the statement month.
It's important to bear in mind that any purchase balance remaining on your account immediately after the 0% period ends will not qualify for the standard interest free period - as you would not of paid the previous month’s statement balance in full.
0% purchase periods
With a 0% purchase credit card you can enjoy making purchases without being hit by expensive interest charges and they can make for a very useful ‘buy now, pay later’ option.
However, you do need to remember that the 0% purchase period is only for a fixed term (usually around 3 to 12 months) as specified by the card issuer, and therefore you need to plan ahead to make sure that you will not have to start paying interest on the balance when the standard rate kicks in at the end of the 0% period.
Some things to bear in mind include:
- You should try and repay the balance on your card in full within the 0% purchase period.
- If you still have a balance remaining once the 0% period expires you will be charged the standard interest rate on it.
- You may want to consider transferring your balance to a 0% balance transfer credit card if the expiry of the 0% purchase period is approaching and you do not think that you can clear the balance in time to avoid being hit by interest charges.
Avoid paying any interest on your credit card purchases
With competition between credit card companies hotter than ever, offering interest free credit on purchases is just one way in which credit card companies are trying to win more custom, and this is great news for those that want to enjoy the convenience and flexibility of credit card spending without the financial pitfalls of interest payments.
With 0% purchase credit cards you can use the card for every day or one off purchases and then spread the repayments without being charged any interest.
However, it is important to remember that the 0% period is only for a fixed amount of time, as specified by the credit card company, and after this period expires the credit card will revert to the card issuer's standard interest rate for purchases.
It is therefore important that you repay the balance on your credit card in full before the 0% promotional period expires; otherwise any balance remaining will be subject to interest charges.
The 0% period offered on these credit cards can vary from one card issuer to another – some offer three or six months interest free credit, and others offer longer period of up to twelve months.
The longer the interest free period the longer you have to repay your balance without incurring any interest charges – you can see the credit cards offering the longest 0% purchase period here.
It is a good idea to keep any eye on your balance and make a note of when the 0% purchase period expires. This is so that you can look at other options in the event that you do not feel able to clear your balance by the time the 0% period ends.
One option is to transfer any remaining balance to a 0% balance transfer credit card when the 0% purchase period is due to expire on your card. However, do remember that you may be charged a transfer fee by the new card issuer for transferring the balance.
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