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With the summer holidays here, the next few weeks can prove and expensive time for parents who often have to pay for extra childcare costs or spend money on keeping children entertained during the school break. Ideally, parents will have planned for the holidays and have a savings fund ready to cover the extra costs or have already factored the additional spend into their budgets, but credit cards can also prove a useful way to access money in the short-term.
A 0% purchase credit card is a good option for those who will spend on their credit card during the summer holidays but who won’t be able to repay the full amount each month. To take full advantage of the 0% rate, borrowers should have a plan to repay the full amount before the interest-free period ends, otherwise they could be hit with significant interest being added to their debt.
Barclaycard tops the 0% purchase credit card chart with its Platinum 27 Month Purchase and Balance Transfer Visa that has a 27-month interest-free period, after which it charges 19.9% APR variable. Applicants must be at least 21 years old and have a minimum income of £20,000. For those who will need to spend during the summer holidays, but who also want to consolidate existing credit card debt onto one card, it also offers 0% for 27 months on balance transfers (3.50% fee) as long as the transfers are made two months after receiving the card.
Borrowers who will be able to repay the full amount each month may be better choosing a rewards card that allows them to gain rewards whenever they use their card. Tesco Bank is currently offering the rewards card with the lowest APR with its Clubcard Credit Card with Low APR Mastercard that allows borrowers to earn Tesco Clubcard points for spending on the card. This card has a 0% introductory rate for the first month, after which it charges 5.9% APR variable. Applicants require a minimum income of £5,000 for this card.
When going abroad on holiday, using a travel credit card with no foreign transaction fees will save borrowers from being hit by transaction fees for using a card overseas. The travel credit card topping this chart at the moment is Santander’s Zero Credit Card Mastercard that can not only be used abroad without extra charges, but also offers 0% on purchases for 12 months. This card charges 18.9% APR variable and requires applicants to have a minimum income of £7,500.
Rachel Springall, financial expert at Moneyfacts.co.uk, said: “Summer spenders would do well to take advance of interest-free credit cards if they are hoping to spread the cost of any purchase. A dual 0% interest-free credit card can also be well-suited to those looking to consolidate any debts, but do not want to take out a separate credit card.
“If consumers are looking to travel abroad over the summer then a credit card with no foreign transaction fees can be a great choice. It’s worth pointing out that a typical credit card charges fees that can apply to every single transaction – so these fees can soon add up.
“It’s not just credit cards where consumers can save on transaction fees aboard, in fact customers could switch their current account to one that is tailored to suit withdrawing cash or spending using their debit card abroad. Some current accounts even include travel insurance too – so it’s worth weighing up all the benefits on offer before applying.”
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