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0% purchase deals offer a 0% interest rate on account balances resulting from purchases. Purchases include paying for goods or services from retailers or companies.
All purchases will be included in a 0% purchase deal - only cash transactions or balance transfers won’t be included.
Credit cards have three types of transaction – purchases, cash and balance transfers, and it’s only the definition of a cash transaction that varies between credit cards.
So rather than what is included, exactly what isn't included is the variable that is determined by what each credit card issuer deems to be a cash transaction.
What is included:
- Buying goods from retailers or companies.
- Buying services from retailers or companies.
What is not included:
- ATM machine withdrawals.
- Buying foreign currency or traveller’s cheques.
- Gambling transactions (unless otherwise specified by the credit card t&c’s), including purchasing food or drink at a gambling establishment.
- Balance transfers (unless the credit card also offers a 0% deal on balance transfers).
What may or may not be included: (Check the individual credit card terms and conditions if you are likely to do any of the following)
- Paying bills.
- Money transfers.
- Purchasing shopping vouchers.
0% purchase deals
A 0% purchase credit card is a very effective and affordable solution for anyone that is planning a larger or more expensive purchase and wishes to spread the repayments without having to pay any interest on the debt.
Of course, these cards are not beneficial to those that repay their balances in full every month, as those that do this are not charged any interest anyway, and should therefore look for a more appropriate card such as a rewards based credit card.
Some things to remember about 0% purchase credit cards are:
- All purchases made on the card are included in the 0% interest rate.
- Cash transactions will not be included in the 0% interest rate.
- The 0% interest period can vary from one card issuer to another.
- Balance transfers are not included in the 0% interest rate unless the card specifies otherwise.
The benefits of a 0% purchase credit card
If you are planning to make an expensive purchase, such as paying for a holiday or buying your loved one an engagement ring, then taking out a 0% purchase credit card could prove the ideal solution.
With these cards you can enjoy a specified period of interest free credit, which could be anything from around three to twelve or more months.
This means that you can make your purchase and then spread the repayments over the specified period without having to pay any interest on your borrowing.
About the 0% interest rate
A 0% purchase credit card can be used to make any purchase, and you will not be charged interest on it during the interest free period.
However, it is important to remember that cash transactions are not included in the 0% interest rate, and therefore should be avoided.
If you make cash transactions you will be hit with hefty fees as well as interest, and this will counteract any benefit you get from being charged no interest on purchases.
Cash transactions include cash withdrawals, online gambling, paying for gift cards and vouchers, making bill payments, and money transfers from your card.
It is also important to remember that, unless you have a combined 0% purchase and balance transfer credit card, you will not receive the 0% interest rate on balance transfers either.
Therefore your 0% purchase credit card should be used solely to make purchases, and you should make sure that the balance is repaid in full by the end of the interest free period to avoid interest charges – or consider moving any remaining balance to a 0% balance transfer credit card.
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