Compare purchase credit cards

What is a purchase credit card?

A purchase card is a type of credit card that’s designed for shopping. Some people choose to take out a purchase credit card so they can spread the cost of purchases over a set period of time, instead of having to save up to afford something first.

You can use a purchase card to make single or multiple purchases, and you can pay for items online or in-store with it. You can even use it abroad – but you should be careful that you don’t get hit with fees for foreign transactions.

What is a 0% interest purchase credit card?

A 0% interest purchase credit card allows you to buy things and repay the balance without paying interest. The interest-free period will vary by credit card, but it is possible to find some purchase cards that offer 0% interest for 30 months or more.

The duration of the 0% interest rate period you’re offered will depend on your credit score and your financial situation. This means that you may apply for a purchase credit card that has an advertised interest-free period of 36 months, but you could be offered a shorter period if you have a poor credit rating or a lot of fixed monthly expenses. And if your credit history is low, you may not be accepted for this kind of credit card.

The number of consumers searching for credit builder cards, low rate cards and purchase cards, and the percentage of those consumers that are homeowners and non-homeowners – according to MoneySuperMarket data correct as of July 2018.

What counts as a purchase?

A purchase simply means anything you’ve paid for in a shop or online. This could be a big purchase like a sofa, or a holiday that you pay by credit card, or something smaller like your weekly food shop.

What doesn’t count as a purchase?

You can still use your purchase credit card to take cash out, transfer balances from an online store account or pay for things abroad – but you will be charged interest if you do.

Why consider a 0% purchase credit card?

There are many reasons why someone might prefer to put their spending on an interest-free purchase credit card. These include:

• Credit card protection: if you buy an item worth between £100 and £30,000 on your credit card, you will qualify for credit card protection.
• Spread the cost of purchases: you can repay the cost of your purchase over a number of months, instead of having to pay out all at once.
• Avoid paying interest: if you choose to repay your purchases over multiple months, an interest-free credit card won’t charge you extra for doing this.

A graph showing the motivations of consumers searching for credit cards and the percentage looking to pay no interest on their spending, build their credit rating, find a low rate card for everyday spending, pay no interest on their spending and other – according to MoneySuperMarket data correct as of July 2018.

Paying off your purchase credit card

There are some things you can do to help make sure your interest-free purchase card stays interest-free for the duration of the deal:

• Set up a direct debit so you never miss a bill – you’ll be charged a fee for any late payment
• Make more than the minimum payment to clear the total debt by the end of the 0% interest period
• Keep in mind that if you miss a payment, you could lose the 0% interest deal
• Contact your provider if you are struggling to pay to see what support may be available

The percentage of credit cards gaining interest on their debt, according to MoneySuperMarket data correct as of July 2018.

What happens once the 0% period is over?

You can keep using your purchase credit card after the 0% period, but any existing balance will be subject to interest, and any new purchases may also attract an interest charge.

If you do repay the balance in full every month then you won’t be charged interest - even when the 0% period is over. That’s because every single credit card comes with its own interest-free period, which can be anything up to 56 days, depending on the card.

If you haven’t managed to pay off the total card balance once the interest-free period has finished, you may be able to move the debt to a 0% balance transfer credit card. This simply moves the balance to another card and means you avoid any interest charges for a set period of time, but there is usually a fee involved with transferring the debt - which is calculated as a percentage of the amount you’re transferring, typically around 3%.

A balance transfer credit card can offer some relief from interest payments on the balance of the card, but it is likely to charge interest if you buy anything on it. If you want to move the debt and keep making purchases, a balance transfer and purchase credit card may be more suitable for you.

How to choose the best 0% purchase credit card for you

When you’re searching for purchase credit cards, it’s a good idea to look at things like:

• How long the interest-free period is
• How much interest you’ll have to start paying on any remaining balance after the 0% period ends
• What the fees are for late payments or going over your agreed credit limit
• How you can manage your balance and any payments, for example at a high street branch or via an app
• Whether the card offers any rewards that you can benefit from, such as loyalty scheme points or cashback on spending

A map showing the percentage of people in the UK looking to apply for a purchase credit card and where they are in the UK, according to MoneySuperMarket data correct as of July 2018.

Check your eligibility before you apply

It’s important to check your eligibility before you apply for any type of credit, because a rejection could have a negative impact on your credit score – and the best deals are reserved for those with the healthiest credit ratings.

When you compare purchase credit cards with MoneySuperMarket, you’ll see which purchase credit cards you’re most likely to be accepted for, so you can apply for one that has a strong chance of saying yes.

How to compare purchase credit cards

Comparing purchase credit cards is really simple. Use MoneySuperMarket’s credit card eligibility checker and fill in a few details about yourself and your finances to compare. You can order the cards by how likely you are to be approved by the provider, how many months you could get interest-free, and by credit card provider. You’ll also be able to see what the interest rate then jumps up to at the end of the deal, and if you’ll get any rewards from using your card.

You can apply for the cards via MoneySuperMarket by clicking through to the provider’s site. Applying for multiple credit cards at once can have a negative effect on your credit score, so it’s best to wait to hear back from your first choice provider.

The provider will look at your credit score and report once they’ve received your application to decide whether or not you’re a credit risk, and if they like what they see, they’re more likely to give you the credit card. If you’re accepted, the provider will then tell you the credit limit and interest rate they’ve set. This won’t always be the same as what was advertised, as it factors in your income and credit report. Soon after you’ll get the card in the mail – after being activated, it’ll be ready to use.