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Top tips for 0% purchase card spending

Top tips for 0% purchase card spending

Category: Credit cards

Updated: 31/12/2012
First Published: 30/11/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The Christmas shopping season is in full swing, with millions of us pounding high streets up and down the country to bag the best gifts for our loved ones.

Arming yourself with the right credit card, such as those offering introductory 0% interest on purchases, can go a long way to help cover the extra costs.

Check out our quick tips on 0% purchase cards before you hit the shops this December:

• What are 0% purchase cards?

Credit cards with introductory 0% interest on purchases allow you to spend in store and online, whilst not charging you interest for a set period.

• How long does the introductory period last?

Interest-free periods will vary from card to card, so shop around for the best deal for you.

Moneyfacts.co.uk Credit Card Best Buys show there are currently seven 0% spending cards offering an interest-free period of 12 months or over. Correct as at 04/12/12.

The current market-leader is the Tesco Bank Clubcard Credit Card, which offers 0% interest on purchases for the first 16 months plus 1 Tesco Clubcard point for every £4 spent in each purchase transaction (£4 min).

Always check out the duration of the interest-free period before you apply.

Do some calculations and diarise the date on which the 0% offer expires to be confident that you will be able to afford to repay the balance in time.

Opt for a card with a longer introductory period if you think you may need longer to pay off the balance.

• What if I miss a repayment?

Never miss a monthly repayment. Even the minimum repayment will do if you are struggling.

If you miss a monthly repayment, the 0% interest offer will not apply. A higher rate will be charged along with a missed payment charge.

• Do I receive 0% for withdrawing cash?

No, these cards offer 0% interest on purchases only. It is never advisable to use your credit card to make cash withdrawals from an ATM.

Interest tends to be applied at a much higher rate when withdrawing cash and you will be charged immediately. A fee will also be charged for making cash withdrawals on your credit card.

• What happens if I can't repay before the introductory period ends?

The key with 0% purchase cards is to pay off the whole balance before the introductory period expires.

If you fail to repay all of the balance within the introductory period, even one month over, the 0% interest will revert to a much higher rate.

Remember, if you use your card sensibly and plan ahead financially these cards can work for you.

Never take out a credit card, or any form of credit for that matter if you are struggling financially or have ongoing debt problems.

Whats Next?

Compare 0% purchase credit cards

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.

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