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Guide to 0% credit cards for retail purchases

Category: Credit cards
Author: Tim Leonard
Updated: 12/12/2017

Credit cards are a flexible and secure way to buy goods and services. All cards will allow you to make retail purchases, but some are more specialised than others.

Some interest-free credit cards charge 0% interest for an introductory period on any purchases you make. Other cards may offer you incentives, such as cashback or rewards for spending on them. Some other credit cards specialise in offering 0% on balance transfers for a set period (we have a separate guide on this subject here).

How 0% interest credit cards work

A 0% credit card works by not charging you interest on any spending made on the card during an introductory period.

At the end of the introductory period, you start paying interest at the provider's standard purchase rate for any balance you have remaining.

In order to make the most of interest-free credit cards, it's best to repay as much of the balance as you can during the initial 0% term. Because of the long introductory period some of these credit cards offer, they can work out as a cost-effective and flexible way to make a big purchase, allowing you to spread the cost without accruing additional interest.

Warning sign Before conducting any borrowing it's wise to have a clear plan on how much and how long it will take you to repay what you owe.
Warning sign Make sure you make at least the minimum payment each month on your credit card, otherwise the provider may decide to withdraw the introductory 0% offer and put you on a more expensive interest rate.

Alternative types of credit card

If you repay the credit card balance in full every month, long 0% periods will not make any difference to you. Most credit cards give you an interest-free "grace" period anyway in which you can repay any purchases you make (this is normally for around 50 days after you make the purchase).

So if you wouldn't pay interest anyway, what's the point of using a credit card?

  • Purchase protection – we'll come onto this in the next section
  • Flexibility – you can manage your monthly finances by spending on the card and then repaying the balance on payday
  • Cashback and rewards – some credit cards offer you cashback or rewards for spending on them, which can add up to a fair sum of money over the course of a year!

Purchase protection on credit cards

Credit cards are governed by an Act of Parliament called the Consumer Credit Act 1974. This states that the credit card provider is jointly liable with the merchant you buy goods and services from for purchases of between £100 and £30,000 in value.

This means that if you buy something that's faulty, substandard, or not delivered, you can get your money back from the credit card provider if you don't get any joy from the merchant.

Even if you only pay a deposit on your credit card for an item or service worth over £100 and pay the balance in cash or by debit card, you are covered for the full purchase amount by the card provider – even if the deposit you paid was less than £100!

Don't withdraw cash using a credit card

Withdrawing cash using your credit card is a bad idea. It's very expensive, and you don't get the enhanced purchase protection for goods you buy. Find out more in our guide Beware of credit card cash advances. If you can, pay for goods and services with your credit or debit card, and use your debit card to withdraw any spending money.

What next?

Compare 0% credit cards for retail purchases

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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.