What’s the deal?
Santander has just launched a table-topping new credit card deal that offers 0% on everything you buy using the card for the first 18 months.
As well as providing the first year and a half interest-free, the Santander Purchase Credit Card offers up to nine months’ 0% on balance transfers, subject to a 3% fee.
Once these honeymoon periods are over the Santander Purchase card reverts to a representative Annual Percentage Rate (APR) of 18.9% (variable).
Who’s it good for?
Obviously, this card is good for anyone looking to make a large purchase as it means they can spread the cost over 18 monthly instalments without having to worry about forking out interest payments.
However, the new deal from Santander is also a good option for those looking to make a substantial purchase even if they have the cash funds in place to pay for it. But why whack it on plastic when you’ve money in the bank? In short, to protect against yourself if what you buy turns out to be faulty, damaged, lost or stolen – or even if the company you are buying it from goes bust.
This is because Section 75 of the Consumer Credit Act makes the credit card provider jointly liable with the merchant if and when such problems arise.
For this protection to apply the item or service will have to cost between £100 and £30,000. But this same cover will be topped up to £60,260 under the more recent Consumer Credit Directive.
If your own personal credit limit isn’t large enough to cover the cost of the entire purchase, its total value will be protected even if you have put just the deposit for the purchase on the card. The deposit can be for any amount, providing the total value of the item is at least £100.
This type of protection isn’t offered on purchases made with a debit card, so even if you have the cash in the bank, it may be worth paying on plastic for the greater piece of mind and then paying off the balance in full.
The only real ‘catch’ of note with Santander’s offering is that the annual interest jumps to a representative rate 18.9% (variable) after 18 months on purchases and after nine months on balance transfers, so it’s best to make sure you’ve any balances cleared by these cut-off points.
What’s the verdict?
If you’re looking for a simple credit card that offers a long interest-free period on purchases, then the Santander Purchase Credit Card is currently the best you are going to get, providing you pay off the debt in this time. It’s also a good option if your secondary motivation is to transfer existing debt from another card.
If, however, you’re looking to JUST transfer a balance, you will be barking up the wrong tree as there are cards with much longer interest-free periods – and with lower balance transfer fees than 3%.
For example, Santander’s own Long Term Balance Transfer Card offers 0% on balance transfers for 29 months, a figure that falls just short of the market-leading 30 months offered by the Barclaycard Platinum Credit Card with Extended Balance Transfer. In addition, the Barclaycard comes with a balance transfer fee of 2.89% compared to Santander’s fee of 3%.
If it’s a low transfer fee you’re after, the Santander Low Fee Balance Transfer comes with a fee of just 0.9%, a figure that is just beaten by the Halifax All In One credit card’s 0.8% fee and the Barclaycard Platinum Balance Transfer with Low Fee credit card’s 0.79% fee (this actually comes with a 1.2% fee but is reduced to 0.79% via a refund).
Remember, the consumer protection offered under Section 75 of the Consumer Credit Act and the Consumer Credit Directive are not confined to the Santander Purchase Credit Card but are a feature of ALL credit cards. So it could be worth putting your purchases on plastic for the extra protection alone.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct