The Best 0% Credit Cards

The Best UK 0% Credit Cards
ratewise logo - ratewise
by ratewise

What is a 0% credit card and how does it work? A 0% credit card gives you the ability to get charged 0% interest for any spending that you put on the card.

However, the spending needs to be new. This factor is important. It is what makes a difference between a 0% balance transfer card and a 0% credit card.

Using a balance transfer card will get you 0% on balances that you had existing on a different card. But for new spending, you pay a regular interest-rate when it comes to the balance transfer card. The same goes for a 0% credit card.

It will not help you cope with your existing balances. However, it will help you pay 0% interest on any new spending. Keep in mind that some 0% credit cards out there can feature both 0% balance transfer offer and 0% purchase at the same time.

This kind of card can be a really good idea if you are looking forward to making large purchases or small purchases but in big quantities. On average, credit cards have an interest rate of about 19%.

This makes interest charges pile up in a short amount of time. 0% credit cards offer you no interest charges for a limited period of time. With a credit card, you can even save up to hundreds of pounds if you use it wisely.

A 0% credit card means that you will get charged 0% interest for an introductory period and also after approval for the card. This means that even if you receive the card you cannot use it with 0% interest if you are not approved.

What is the difference between 0% on balance transfers and 0% on purchases?

If a card offers a 0% APR for an introductory period, it means that you will not be charged any interest for any balances you incur while using the card to make a purchase.

This is only valid for a limited period after activating your account. To understand this more clearly let’s take an example. Let’s say you get approved for a 0% credit card.

If you buy a new bed using that card but you do not pay the balance in full by the end of the month, this means you will not be charged interest on that particular balance. But still, this is only valid for the limited period that is set with the 0% credit card.

You may have also become aware of 0% interest offers related to balance transfers. This means that any credit card balances you send directly to your new 0% credit card, will stay for a predetermined period without being subjected to any interest charges.

Because the average APR on a credit card is 19%, moving a transaction from one card to another from a large balance to a 0% balance transfer card can save you a large amount of money. This can be beneficial mostly for those who are trying to pay off debt.

How much money can you save by using a 0% credit card?

A card that has a 0% APR introductory period for any kind of purchase can save you hundreds of pounds regarding interest. It is better to use a 0% credit card then continuing to use the same balance at the usual APR of 19%.

How do you find the best 0% credit card?

Everyone has a different situation on why they need to own a 0% credit card. It is important to know some features that you need to take a look at before applying for such a credit card. By doing this you make sure to pick the card that is right for the situation you are in. 

Tips to consider before applying for your 0% credit card:

1. Fees

A beneficial factor of these 0% credit cards is that they rarely come with an annual fee. If you find a 0% credit card that has such a fee you might need to keep looking for a better one.

Keep in mind that these cards usually do have transaction fees when you are out of the country. Although you can find some 0% credit cards that do not come with a foreign transaction fee.

If you are planning to apply for a card that has both 0% purchase and 0% balance transfer period, keep an eye out for what the balance transfer fee is. A balance transfer fee usually is about 1% to 3%.

It is generally a good option as it could be less expensive to continue paying high-interest rates. Getting a deal with a lower fee for shopping around may save you extra money.

2. The 0% balance transfer time

Unless you have a great balance on another credit card, a 0% credit card will be very useful to use. If you do have a balance where you pay a high interest-rate, it can be a good idea to add it to your new card.

It can be tricky to keep track of payments when you have a card that comes with two 0% offers that differ in length. That is why the best option to choose from is a credit card that comes with 0% purchase and a balance transfer card that comes separately.

It is important to read the terms and conditions of these credit cards carefully to be clear on how the payments you make are applied. Keep track of your balances frequently to prevent paying interest that is unnecessary.

3. Average APR

The APR that you can receive with the 0% credit card will be dependent on your credit rating. You need to know that the visible representative rate for the card can be used by only 51% of people that apply.

There are some cases where you can get a high APR. Be sure to look for a lower APR card you can get approved for.

4. The 0% period length

You might already know that the best way to find the best 0% credit card with a long 0% period is by simply looking through various cards. But focusing only on this feature may come with drawbacks.

The first reason why it could be a bad idea to focus only on the length of the 0% period is that they often come without other benefits or features that can come in handy.

Additionally, high-interest fees. These could lead you to pile up more debt than you can actually afford to pay from the balance. That can be because you might start seeing trouble as soon as the 0% period ends.

Conduct proper calculations to decide on what length of the 0% period is right for you. Try to see which one doesn’t make you lose more money than you are actually saving.

5. Additional benefits

If you are concentrating only on the 0% interest on a new purchase, then these benefits will not be the primary thing to consider.

Although if you can’t decide on which cards to choose from that have a similar 0% interest offer, the benefits it comes with can help you decide.

Benefits help you save money in most cases. The most common benefits that you can get from retailers are rewards. However, because of competition, rewards have become much more flexible in the present day.

Cards can also offer benefits such as travel insurance, holiday bookings, and even discounts on the money you spend traveling. 

Rules to you know before applying for a 0% credit card

  • If used correctly these cards are great. However, if you use it wrong the depts you can sink in are costly. Keep in mind to borrow only the amount you can afford to pay off. Borrowing for the purpose of filing income gaps might only leave you in a spiral of debt. That will be challenging to get out of. 
  • Always manage to make at least the minimum payments by the end of the month. Remember to set a direct debit for the required minimum repayment immediately after getting accepted for the 0% credit card. Even though these cards come with 0% interest, they require repayments by the end of the month. Missing your payments can mean that you can get charged a fee and even lose your 0% deal. This action can also affect your credit report negatively.
  • Try to clear the card during the 0% period. It is important to calculate the amount of money needed in order to clear the balance. Not doing so and going even one month past the 0% period can leave you with the rocket high-interest rate.

The way you can keep up without making any mistakes while using this card is to divide what you spend by the number of months you have with the 0% purchase rate.

After that set up the direct debit to clear out your card the moment the period ends. This process is similar to a loan. Either you pay the balance in full by the end of the period or you repay it over some time.  

Do you get charged every time you use your credit card?

You won’t get charged immediately every time you use your credit card to make a purchase. But when you use your credit card you may be charged a fee if you withdraw cash at an ATM.

You’ll also be charged interest if you don’t make your credit card bill payments on time.

Does having several credit cards hurt your credit score?

Having multiple credit cards won’t hurt your credit score if you are able to keep your spending within your budget and you make your bill payments in full on time.

You have to know your ability to organize your finances and track multiple credit cards.

Is it better to cancel unused credit cards or keep them in the UK?

It is better to actually keep your unused credit cards open so you have a longer credit history and amount of credit available to you.

This will potentially raise your credit score and help you if you apply for a loan in the future.

Is it bad to pay your credit card twice a month?

It is not bad to make multiple credit card payments every month. The most important thing is that you do not exceed your credit limit and you make your payments on time to avoid interest and fees. 

How many is too many credit cards?

You can have as many credit cards as you feel you will use. However, try not to apply for more than one credit card every six months as this could harm your credit score. 

Read More

Categories: Credit Cards
Tags: UK