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With Christmas adverts already on TV and just over two weeks until Black Friday, the festive shopping season has already begun, however consumers are being warned that if they use credit cards to pay for their Christmas shopping they will have less time to pay off debts before being charged interest compared to a year ago.
Data from Moneyfacts.co.uk has found that consumers can currently find deals offering up to 26 months interest-free on purchases, however a year ago the top 0% offer on purchases was three months longer, at 29 months from Sainsbury’s Bank. As a result, those using credit cards this year need to pay off the outstanding balance three months quicker than a year ago.
Top introductory interest-free purchase credit card offers
Credit card | 0% purchase offer | Purchase APR |
MBNA Limited 0% Transfer and Purchase Credit Card mastercard | 26 months | 20.9% |
Barclaycard Platinum All-Rounder Visa | 25 months | 19.9% |
Sainsbury's Bank Dual Offer Credit Card Mastercard | 25 months | 20.9% |
Tesco Bank Clubcard Credit Card Purchases Mastercard | 24 months | 19.9% |
Bank of Ireland UK Matched Mastercard | 24 months | 19.9% |
Sainsbury's Bank Purchase Credit Card Mastercard | 22 months | 20.9% |
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Credit cards remain not just a convenient way to spend for the everyday consumer, but they also offer protection in the event of a dispute with a purchase of goods or services. In addition, consumers can give themselves more time to repay goods if they apply for an interest-free offer. As Black Friday looms, this week may be a popular time to apply for one such offer.
“The Black Friday and Cyber Monday sales offer significant savings on high-end goods, such as electronics. If consumers have little savings or means to buy high-cost items, then a credit card could be a good alternative, but it is important that they work out a realistic repayment plan so they don’t regret the purchase later down the line.
“Shoppers may not necessarily use these sales to buy others gifts for Christmas, in fact, according to PwC, only 20% of consumers buy most of their presents over this period. Therefore, shoppers could still use the plastic again to cover the festive spend – particularly if they have some time left utilise an interest-free offer.
“As it stands, consumers will have less time to pay their debts if they acquire the longest interest-free offer right now, compared to the longest offer this time a year ago – three months less in fact. MBNA currently offers a 0% introductory purchase offer for 26 months, whereas Sainsbury’s Bank had the longest deal a year ago at 29 months.
“Making more than the minimum repayment on a credit card is important to clear debts before an interest-free offer expires. For example, shoppers would need to repay around £116 per month to pay back £3,000 over 26 months. If a borrower made a purchase of £3,000 on a card charging 20.9% APR and repaid just £100 per month, the debt will linger for over three years and it will cost them £1,114 in interest*. This demonstrates how important it is for borrowers to clear their debts faster or take advantage of an interest-free offer to spread their repayments.”
*Credit card repayment based on £3,000 purchase, based on an interest rate of 20.9% APR, minimum fixed repayment of £100 (thereafter a minimum of 1% plus monthly interest or £25, whichever is higher) and would take three years and six months to pay back, costing £1,114 in interest over this term.
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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. 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.
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The Moneyfacts Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.
This week's selection includes a new one-year fixed ISA from Virgin Money and a credit card with a recently increased 0% introductory balance transfer term.
The average APR on unsecured loans and credit cards rose in the first three months of 2024, while the number of lenders and card providers fell.
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Everyone knows Christmas can be an expensive time of year, with the cost of food, presents and socialising quickly amounting. If you’re looking to make your money stretch a little further this festive season and beyond, we list some of the top cashback credit cards currently available.
Earn up to £125 cashback with American Express; find a 0% introductory purchase rate from Santander.
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.