Compare the best 0% interest credit cards

0% credit cards explained

If you're not sure a 0% interest credit card is for you, or even what these multi-purpose cards are, read on.

On this page:

1. What is a 0% interest credit card?
2. How do 0% interest credit cards work?
3. Benefits and liabilities
4. Am I eligible for an interest-free credit card? What impacts my application?
5. What will my credit limit be?
6. How long will it take to get the card?

What is a 0% interest credit card?

Certain credit cards offer 0% interest for a certain period of time on purchases or existing credit card debt transfers. This gives people time to pay off the cost of a large purchase or other debt without interest adding to the balance.

Interest-free credit cards offer 0% interest on both purchases and balance transfers, with some cards also including an interest-free term on money transfers to your current account. This makes them ideal if you're looking to consolidate credit card debt and also need to make a large purchase, or perhaps need to give your bank balance a bit of a cash injection.

Note that a balance transfer refers to the transfer of debt from another credit card, while a money transfer adds funds to your current account to help you get out of your overdraft. Both transfer types usually require a fee to be paid, which may also be discounted during the introductory interest-free term.

How do 0% interest credit cards work?

No-interest credit cards work in much the same way as all other credit cards. Once you've successfully applied for such a card and it has arrived, you can start using it straight away to make purchases and transfer your debt over from other cards.

When it comes to transferring credit card debt using a balance transfer, remember that there will be a fee to pay, which gets added to your overall debt. Once you clear the debt from your previous card, it's a good idea to cancel and cut up that card so you don't get tempted to add new debt to it. This will also have a positive effect on your credit score.

An oft-asked question is: How do I make a balance transfer? You'll be surprised to find that the process is quite easy. You simply need to have the details of the card you want to transfer your debt from to hand, and then contact your new credit card provider. They will arrange the transfer for you.

As with all other credit cards, there tend to be high fees for withdrawing money, so it's generally not advised to use these cards at an ATM. Similarly, there will likely be high fees to pay if you want to use these cards abroad, so if you really want to travel with a credit card, you may want to have a look at the top travel credit cards instead.

Also common among all types of credit cards is purchase protection under the Consumer Credit Act, which means that if you buy an item priced between £100 and £30,000 with your card that ends up getting lost or is found to be faulty using a zero-interest credit card, you'd be able to claim back your money from the card issuer. This can make credit cards a safe way to pay for things online, especially if you can avoid paying interest.

Remember that these cards come with a minimum required repayment per month. Even though you're not paying interest, you still need to repay the provider some money every month (check the Details to see what minimum monthly payment is required), or risk your interest-free deal being pulled and damaging your credit score. To make sure you don't miss any repayments, you may want to set up a monthly standing order.

Benefits and liabilities

As stated, the main benefit of credit cards with 0% interest during their introductory term is that you can use them for multiple purposes while avoiding extra debt adding to the balance via monthly interest build-up. And, like other credit cards, they also benefit from purchase protection.

Additionally, some cards may offer rewards or other extras to entice borrowers. Remember that the best interest-free credit cards are not necessarily the ones that offer the longest introductory interest-free term and/or the biggest rewards - the best 0% interest credit card for you might be the one with the lowest or no balance transfer fee.

It's always worth doing some maths before you pick a card to figure out how long you're likely to need to repay the balance. For instance, you may find a 12-month interest-free deal with no balance transfer fee, which is great if you've got a manageable amount of debt, but for more significant amounts, you may need longer to pay it off, in which case you'll want to look for a deal with a longer introductory term.

Just make sure to stay organised, as one of the potential liabilities of these cards is that you may lose track of when your interest-free period ends and not have the debt paid off in time. It could be worth noting the date your introductory term ends in your diary, and budgeting so you pay in enough every month to clear the balance in full by the end - just divide the number of introductory interest-free months by the balance, and voila! Pay that amount off each month and you'll be debt-free by the end of the term.

Given the finite nature of the 0% deals on these cards, you may not want to use them in the long term. Even a card that gives you 30 months to pay off your debt will eventually reach that point, after which the interest rate can ramp up and it might not be as competitive as a low-interest card, for instance.

In a similar vein, if you are only interested in making a few large purchases or clearing previous debt, not both, you'll find that there are longer introductory terms of 0% on purchases or balance transfers to be found if you go for a specific 0% balance transfer or purchase card.

Overall, 0% credit card offers, or any credit card for that matter, should not be used to supplement income or otherwise become something you rely on. While they can be valuable assets for making large emergency purchases where savings fall short, or for helping you get out of credit card or overdraft debt, you don't want to spend the rest of your life transferring debt from one 0% interest credit card to another - it's unsustainable and could be quite costly given that most long-term introductory deals will come with fees.

If you're struggling with credit card debt, consider contacting a debt charity to help you sort out your finances. A 0% interest credit card offers only a temporary solution for those who are seeking extra funds.

Am I eligible for an interest-free credit card? What impacts my application?

The most important consideration before applying for a 0% interest credit card - and indeed any credit card - is your credit rating. Make sure that your credit score is as high as you can make it before you apply. Not only will this help you get the card that you want, it will also help you get a better deal.

With a poor credit rating, you may still be offered the card, but you will likely have a higher interest rate to pay once your introductory term ends, or you may be offered a shorter term. That's because the representative annual rate only has to be offered to 51% of applicants, and people with a lower credit score are seen as a bigger risk.

Note that having a credit card won't necessarily reduce your credit score, but missing payments will, as will applying for a credit card and not getting it. If you're turned down for an interest-free credit card, don't immediately apply for another one, and certainly don't apply for multiple cards at once. See if you can improve your score first.

What will my credit limit be?

Your credit limit is another thing that you can't know until you apply. There's no specific set limit that applies to all borrowers, with your credit rating playing a key role in determining the amount of credit you will be offered. It's possible for your limit to increase over time if you are seen as a reliable borrower (e.g. when you make more than your minimum payment per month and don't miss any).

How long will it take to get the card?

It usually takes between one and two weeks for a new card to arrive, with most people receiving their card in about 10 days.

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