Compare other 0% on purchases credit cards.
It didn’t take lenders long to get wise to the tactics of the “rate tarts” who continually moved their debt to avoid paying it off. Card issuers have started adding fees of up to 3% of the value of the balance transferred for anyone wanting to move their balance to a new card, but those with an empty credit card, or no credit card at all, have nothing to stop them from taking advantage of some of the great ways to save with a 0% purchases card.
Why go for a 0% purchases card?
Only people who are already clear of their current debt should go for these cards. If you’re already carrying around a large financial burden, you should be looking to pay it off while minimising the interest you pay on it, rather than surfing the balance and continuing your spending spree. Read our guides to balance transfer cards and lifetime balance transfer credit cards for more information on clearing your debt.
If you are certain that you’ll be able to pay the full balance off before the promotion ends, you can use 0% on purchases cards for large purchases - much like an unsecured loan, but without having to pay any interest.
Additionally, if you are disciplined and sensible with your money, at the very least you can use these cards to get discounts on things you already buy, or at the most, you can make actual physical money from them.
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The best cards now offers ten months interest free on purchases
The more complicated way of making money from these cards involves being vigilant and ensuring you know exactly when your promotional 0% offer ends. You do all your normal spending on your 0% purchase card, and then move the money you would have spent on these items into a high interest savings account or ISA. When your promotional period ends, you simply take the money from your savings account to pay the credit card off, and you’ll be left with at least a few quid in interest from the savings account.
However, if the interest rate on the account is low or dependent on an annual bonus, the gains can be limited. Although this isn’t a new phenomenon it’s recently acquired a name: “stoozing”.
However, being a “stoozer” isn’t to be confused with being a rate tart, as rate tarts shuffle debts to prolong the day when they have to eventually pay them off.
This might sound simple, but it really shouldn’t be taken on lightly. The interest you pay once your 0% promotion has ended will be in the region of 17 per cent, so you need to make sure the balance is completely clear by this date.
Compare the leading savings accounts to find out whether stoozing is worth it for you.
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What are the pitfalls of a 0% purchases card?
Firstly, make sure you know exactly what you bank considers to be a “purchase”. While normal spending will fall under the 0% offer, cash advances - taking money out at a cashpoint, online gambling, or in some cases, buying gift vouchers - won’t be covered in this section. You’ll start paying interest immediately and at a higher rate too. And these purchases will be the last things to be paid off - so they’ll sit in your balance accruing interest for as long as possible.
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Which card for me?
If you’ve read over the pitfalls and benefits of 0% purchase cards and have decided that this is the right choice for you, check out the best 0% purchase credit cards to compare promotion lengths, and the rates you’ll get after any introductory deals have ended.
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