Credit cards Updated:
'Tis (just about) the season to be jolly, but before all that festive fun begins, chances are you've got a bit more shopping to do – and if you're turning to credit, you'll want to find cards that offer 0% interest deals on purchases to spread the cost of Christmas without interest adding to the bill.
Using cards that offer 0% interest on purchases means you can shop without needing to worry about the financial hangover. You can cover your festive spend and pay the balance off in the New Year, and as long as you go about it the right way – i.e. by ensuring you pay off the full amount by the time the interest-free deal comes to an end – it could be a great way to tick everyone off the gift list.
There are a wide range of 0% interest cards to choose from, and competition in the sector is fierce – providers are vying for your business, and are offering record introductory purchase terms to tempt you. But, as with any card they need to be managed efficiently, and should only be considered by those who are truly financially organised.
Not only will you need to ensure that the full amount can be repaid by the end of the interest-free period – failing to do so will mean interest will quickly start accumulating – but you need to make absolutely certain that you meet at least the minimum repayments each month, because if you miss one, your interest-free deal will effectively be cancelled and you'll start racking up additional debt.
However, if you make sure you can comfortably afford the minimum payments and have a plan in place of how you'll repay the lot, a 0% purchase credit card could be a great way to cover your festive spend without incurring any interest.
Sound like a good deal? Then you'll need to find the card to suit. Here's a run-through of the 0% purchase credit cards currently sitting at the top of the Moneyfacts best buys.
Taking the top spot in the 0% purchase sector is this card from Post Office Money, which boasts the longest introductory purchase term available. Borrowers can spread the cost of their purchases for 27 months before interest is charged, but a transaction must be made within three months of the account being opened in order to quality for the introductory deal. As an added bonus, the card offers interest-free balance transfers for 16 months, and money transfers are also permitted, albeit without an interest-free offer.
Clydesdale Bank takes second place with its Gold MasterCard, offering an interest-free purchase term of 26 months as well as 0% balance transfers for a whole year. Even after the interest-free periods have come to an end, balance transfers will be charged at a highly competitive annual rate of 11.9%, and money transfers can also be arranged at any time.
Yorkshire Bank secures its place in the top three with its MasterCard that mirrors Clydesdale's offering, boasting lengthy interest-free periods for both purchases and balance transfers.
Next up is this deal from Sainsbury's Bank. Not only does it offer a generous interest-free term on purchases and a balance transfer deal that's highly competitive in this sector, but it also offers a reward scheme in the form of Nectar points, making it ideal for loyal Sainsbury's shoppers.
This card from Halifax comfortably secures a top-five position by doing exactly what it says on the tin. The All in One card is just that, offering interest-free terms of a full two years on both balance transfers and purchases (subject to status – check your credit report with Experian CreditExpert to see how likely you are to be accepted), and it also boasts one of the lowest balance transfer fees around, offering an excellent combination for the savvy borrower.
AA's credit card rivals Halifax by offering 24 months of interest-free purchases and balance transfers, but it just misses out on a higher place due to its higher balance transfer fee. Nonetheless, it offers a highly competitive deal, although customers should bear in mind that they'll need to make a purchase within the first three months in order to qualify for the interest-free offer.
Information & Rates correct as at: 26.11.2015
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.