What is a 0% purchase credit card?
Credit cards offering 0% interest for a fixed period provide shoppers with a substantial amount of time to pay down their debt.
Unlike regular credit cards, which offer up to 62 days’ interest free, a 0% purchase card gives users between 6- 13 months breathing space before interest is charged.
0% purchase cards are essentially credit cards with long interest free promotional periods attached.
0% purchase card traps
While interest free cards do have their perks, shoppers should be cautious. When the interest free period ends the standard interest rate for purchases on the credit card is applied.
If you haven’t been paying down your debt, or worse still, have overspent on the card, you could be in serious financial trouble.
To avoid falling into debt, shoppers should make regular repayments to the card. It’s essential to have the debt cleared entirely when the promotional period ends, if you want to avoid paying interest.
While interest free cards sound extremely attractive, if you are someone who has trouble managing your finances, you are much better off saving for your purchase first and paying upfront.
When shopping for a 0% card look for:
- Long interest free periods: To make the most out your 0% purchase card, consider a card with a long interest free promotional period. This will give you time to develop a solid payment plan to clear the debt before the interest free period ends.
- Low ongoing purchase rate: Like anything, all good things must come to an end, and so must 0% interest free periods. It’s important you focus on the interest rate you will be paying when the promotional period expires, before you sign up to the card.
- Look for a card with a low annual fee and features to suit your personal needs.