Want to transfer an existing balance to a o% interest credit card, or spread the cost of a new purchase over several months interest-free? MoneySupermarket is independent and free to use, so compare the best 0% card deals today.
You might think of a credit card as an expensive way to get into debt. But interest-free credit cards are different. If you use a 0% card wisely, you can effectively borrow money for nothing. You can also cut the cost of existing debts with an interest-free card.
Why compare interest free credit card deals?
Interest-free credit cards can be a great way to manage your money, whether you want to spread the cost of a spending spree or get your debts under control. Let’s say you decide to splash out on a family holiday for £2000. If you buy the trip with a standard credit card, you could pay interest of about 18%. But with a 0% card, there would be no interest to pay, sometimes for two years or more. In other words, it’s like an interest-free loan.
A number of card firms also charge 0% on balance transfers. So, if you have run up debts on another card or cards at a high rate of interest, you can simply switch the balance to a 0% deal and start saving money.
What are the benefits?
Interest-free credit cards can help you to manage your household budget, saving money on both debts and purchases. If, for example, you pay for your £2000 holiday with a credit card at 18%, it would cost almost £100 in interest over two years. But buy the holiday with a 0% card and you would pay no interest at all.
The savings can be similarly impressive with 0% balance transfer cards. Let’s say you have a £2000 debt on a store card that charges 29.9%. If you clear the debt in two years you will pay approximately £112 in interest, compared with nothing on a 0% deal.
Credit cards also offer some protection to consumers in the event that the goods or services are faulty, fail to arrive or the supplier goes bust.
What are the drawbacks of 0% interest credit cards?
If you take out a 0% card, it’s important to clear your balance before the 0% offer expires; otherwise you will start to rack up interest at the standard rate. The best way to stay on track is to set up a direct debit. For example, you could set up a monthly direct debit for £84 to be sure to pay off a £2000 debt in two years.
You should be careful not to spend more on the card than you can afford to pay off during the interest-free period – and it’s often a good idea to cut up the card when the 0% deal expires.
Remember, too, that a good deal for purchases is not necessarily a good deal for balance transfers. Some cards, for example, offer 0% on balance transfers for 26 months, but 0% on purchases for only three months. If you want to both spend and transfer a balance, you will probably be better off with two separate credit cards.
Also watch out for the fees on balance transfer cards, which can be as much as 3% of the transferred balance. In other words, you could pay a fee of £60 to switch a £2000 balance.
Interest-free credit cards are not available to everybody. Most card issuers reserve their best deals for customers with a spotless credit record, so your application could be turned down if you have struggled with debts in the past.
What are the alternatives to interest free credit cards?
There are a number of alternatives to interest-free credit cards, though you will have to pay interest on your borrowings.
A personal loan, for example, allows you to borrow a fixed amount over a fixed period, usually at a fixed rate of interest. If you want to borrow a large amount over a long period, you might therefore be better with a low rate loan.
Another option is a credit card that charges a low rate for the lifetime of the balance. You would not then have to worry about clearing the debt within the 0% period
Your personalised chance of approval
We’ve taken the details you gave, and used them to show you personalised scores to tell you the chance that your application for each card would be successful.
Why is this important?
Every time you apply for a credit card, a mark is left on your credit score. That means it’s better to get it right first time. Your scores help you understand which cards you have the strongest chance of getting.
The higher the score, the stronger chance you have of getting the card. If you see a very low score, you’ve probably better off choosing a different card.
- Consider a different card
- Not eligible
- Your chances are good
- You've been pre approved
If you see a high score, you can be fairly confident. The scores aren’t a guarantee, as acceptance of your application is at the sole discretion of the card issuer, but they should help guide your choice.
In some cases, we will not be able to display a score for a product because we do not have enough information about the card issuer’s acceptance criteria or we have not been able to match your details at the credit bureau.
We work closely with our partners to improve our eligibility scores for all products that are of interest to you.