Best 0% Interest Credit Cards Compared
If you want to buy something on finance, but don’t want to pay those pesky interest fees, then you need a 0% interest purchase credit card.
0% Credit Cards – Need to Knows
Before you sign up for a 0% card, get to know the key facts:
- Up to 30 months of 0% interest spending.
- Must make minimuim monthly repayments.
- Failing repayments can lose you the 0% rate.
- Make sure you can repay the full amount after the 0% ends.
- Not everyone gets the longest rate.
- The length of 0% depends on your credit history.
Read the full guide below, or skip to the best rates.
Compare the Best Credit Cards Available
Because all credit cards offer different incentives / benefits, we’ve separated our list based upon the rewards you want.
What is a 0% credit card?
A 0% credit card works just like a regular credit card, but doesn’t charge any interest, as long as you make the monthly minimum payment, and pay it off before a certain date.* The period in which purchases may be made at 0% varies, and can be from a single month in some cases, and up to two years or more.
How do 0% credit cards work?
You make a purchase from a store using the card, just as you would with any credit card. The difference is that you will pay off the total amount for the purchase(s) made on the card, but you won’t pay additional interest charges. If used correctly, this is a no-interest loan for the cardholder.
If you miss a payment, or don’t pay off the balance in the time period given, interest will be charged from that point onward.
Why choose a 0% credit card?
If you are someone who reliably pays at least the monthly minimum on your credit card, then a 0% credit card would allow you to take out interest-free loans, to get the things you want, sooner. Big-ticket items can be purchased and paid off over time, without paying more than the ticket price.
There are also advantages with regard to consumer protection, just for using a credit card. If items are faulty, are not delivered as promised, the credit card issuer offers a level of protection which allows you to claim back your losses on purchases over £100. Consumer protection rules allow you to claim back up to £30,000 (or even up to £60,260 in certain cases).
If you practice good credit habits, a 0% credit card can be a great way for you to maximize your ability to spend, without extra interest fees and expense.
What can a 0% purchase card be used for?
A 0% credit card can be used for the same things a regular credit card can be used for, but the 0% interest offer only applies to new purchases in most cases. Some cards are specific to a certain store; others can be used in any store, or online.
If you use the card for money transfers, to transfer a balance from another card, or use the card to take a cash advance or currency purchase (such as “travel money”), then you will likely pay interest from the time of transaction. Some of these services also charge a high interest rate, so this may not be a good way to use the card. Be sure to check first, if you hope to move a balance from one card to 0% interest card, to make sure the balance will be included in the interest-free offer.
The most effective way to use a 0% interest card is to make new purchases, pay the minimum payment on time each month, and pay the balance off before the 0% interest period is complete.
How to apply for a 0% credit card
Find a credit card company offering a 0% deal, or search for comparison sites that will present you with all of the options. No credit card is the “best” one for every situation, so go over the details carefully to decide which one is best for you, your situation, and your spending and repayment habits (although you can compare our best deals on credit cards here).
Once you have identified which card seems to suit you best – it’s a good idea to choose a few candidates – have a close look at the terms and rates. Ask yourself:
- How long is the 0% interest period?
- What is the APR after the interest period is over?
- What is the APR if I miss a payment?
- Are there any restrictions of use?
- If applicable, can I move my balance over from another card and still take advantage of the 0% interest feature?
When you have a few top choices, apply for one of them. Wait to see if you are successful before trying another one, because too many recent credit applications can harm your chances of getting a card, or can lower your credit limit if you do get one.
Pros and Cons of a 0% Credit Cards
Pro – If you have good credit habits, a 0% credit card is a straightforward, interest-free loan.
Con – To get approval for most 0% credit cards, you’ll need to have a pretty good credit rating. This is because the credit card company is taking a risk in offering loans at 0%, and needs to keep costs low by choosing the most reliable borrowers.
Pro – A 0% credit card allows you to make major purchases immediately, even if you don’t have the money up front.
Con – If you do miss a payment or carry a balance past the 0% interest period, the interest rate may be quite high. (To avoid this, make sure to make your minimum payments, to pay the balance off on time, and to choose a card with a low APR. It is also a good idea to set up an automatic debit transaction to make at least the minimum payment each month.)
Pro – When you make a purchase using your card, the card company (and the supplier) is responsible for that purchase.
What will the credit limit be on my card?
Spending limits will vary depending on your credit rating and other factors, such as how much you earn, how much you already owe, your history, and even how much you could borrow now, but haven’t. Learn how to improve your credit score here, and if you’re a young person looking for a loan here.
How much you earn is a factor, because you will need to demonstrate that you have some means of paying back the money you borrow. Individuals with no official income might still be eligible for a card, but the credit limit – how much you can spend on it – will be quite low. Someone with a very high declared income will be able to handle a higher repayment schedule, and so they will usually be able to borrow much more.
Credit companies will also take into account how much money you already owe to creditors. If you have a lot of debt when you apply for a card, your credit limit will be lower, or you may not be approved at all. These debts can include mortgages, bank loans, other credit cards, and even bank account overdrafts.
Your borrowing history is also important. If you have borrowed money and had trouble paying it back, your credit limit will be lower, but if you payed back past loans without any problems, they will feel more confident in giving you a higher credit limit this time.
No history of borrowing will also decrease your credit limit. Because they don’t know if you will be good at repaying the debt or not, they will offer a lower limit until you have demonstrated that you can successfully handle the loan.
A surprise to many people is that credit companies consider money that you don’t currently owe, but that is available to you if you want to use it. For example, having a lot of credit cards with zero balances is a negative. This is because you could, in theory, spend the maximum on all of these cards at any time, and not be able to pay all of the minimum payments due for those cards and a new one. It is better to carry just a couple of credit cards and keep them in good shape, rather than accept several credit cards that you don’t need.
A final factor is the number of times you have applied for credit in recent past. Many applications for credit may indicate a crisis or financial emergency in your life, and a credit company is less likely to take a risk if they suspect something is wrong with your ability to secure credit, or maintain the debts you already owe.
Demonstrating that you can reliably pay back what you owe will be noticed. Most credit card companies will offer a higher credit limit – or up your limit automatically – once you have established a good track record in using the card responsibly.
How long will it take to get a card?
If you apply online, the process takes about ten minutes for most cards. Card companies can take anywhere from five to ten days to make their decision if you apply by post, but most online applications give almost immediate results.
If you are successful in your application for a 0% interest credit card, it will usually arrive within seven to ten days.
You will receive a PIN number and information on how to activate your new card. Activation takes only a minute in most cases and your card can be used immediately after it is active.
What are the minimum repayments?
Minimum repayments will vary depending on how much you owe on the card. Sometimes cards charge a minimum rate, such as £12, on cards with even a very small balance, but otherwise the minimum monthly payment is usually something like 1% of the total balance owed.
This may be beneficial for short periods of time, but be careful: paying off a credit card over many years can be expensive, as the interest charges will add up. It is nearly always a good idea to pay off balance as soon as you are able, especially if you are nearing the end of your 0% interest period.
*If a minimum payment is missed, or the deadline date passes with a balance still outstanding, interest is charged from that point forward.
What are the alternatives to a 0% Credit Card?
Sometimes friends or family can help out with a loan (with or without interest), but this can cause complications and hard feelings, especially if anything goes wrong with repayment. It also often comes with strings attached: the one loaning the money may want to know what it will be used for, and may want some say in what is purchased, or even how it is used once you own it. You can also browse the best personal loan deals here.
These can be convenient, but carry a heavy fee. A fee of £3 for a loan of £100, for example, seems small, but when you consider that the money is only loaned for a week or two in most cases, this means the annual interest is very high. In these cases, almost any other form of loan is less expensive in the long run. Find out more about payday loans here. There are alternatives that are slightly better, such as instalment loans.
If you have money in the bank, or in other investments, whether or not it is best to spend it depends on how much it is earning you where it is. If you are earning any interest at all on savings and investments, then a 0% credit card is a better deal.
How do I pay off a credit card?
The best way to pay off a credit card is to pay as much as you can afford, each month – and pay at least the minimum. This minimises the interest you will pay by dropping the balance more quickly, avoiding penalties and other fees.
It might also be a good idea to keep the card at home, rather than carrying it around with you where you may be tempted by impulses to buy something on credit.
How do I reduce my credit card debt?
The best way to reduce credit card debt is to keep your monthly expenses as low as you can, but budget for a payment for more than the minimum allowed for your credit card. Plan your purchases carefully and limit your spending on credit to items of high importance. Having some credit left to deal more quickly with emergencies, or to take advantage of great deals, is also a great way to keep expenses low. You can also look for help from charities, such as the Debt Advice Foundation, and Step Change.
How do I cancel my credit card?
- To cancel your credit card, it is best to first pay off the balance. Many credit card companies will not deactivate a card while there is still money owing on it.
- Once this is done, contact your credit card company, in writing, and direct them to close the account.
- Don’t cancel more than one card at a time. This might cause difficulty in securing new credit in the future, as it may suggest that you’ve had a financial crisis.
- When you are certain that the account is closed, cut up the card.