Credit cards with interest free periods are a useful way to get some breathing space with your borrowing, allowing you to put off paying interest for as long as just over three years.
There are three types of credit cards offering 0% interest:
- 0% purchase cards – cards that charge no interest on new purchases
- 0% balance transfer cards – cards that won’t charge interest on pre-existing balances transferred to them
- 0% money transfer cards – cards that allow you to transfer credit as money into your current account you can withdraw and spend as cash
However, some cards combine two or three of these features together, so it’s possible to get one card to handle your interest free borrowing.
Best of both world cards – 0% purchases and balance transfers
These cards offer the longest 0% periods of equal length for balance transfers and purchases.
But note that by combining two features together these cards are a bit of a compromise – if you choose a card that specialises in either purchases or balance transfers, you could enjoy longer 0% periods.
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Interest free money transfers
If you would like to borrow cash without paying interest you can get a card with a 0% interest money transfer facility.
These two cards offer 0% money transfers as well as balance transfers, but watch out for the slightly higher transfer fee applied to money transfers.
Balance transfers, purchases and cashback
It’s possible to get a card that can offer cashback on your spending as well as interest free borrowing.
Santander’s 123 card offers a lot of flexibility and potentially lucrative cashback benefits, but bear in mind it comes with a £36 annual fee.
Low rate cards
A special mention needs to go out to low rate cards here, which offer all forms of borrowing at one low rate permanently.
You will be charged interest from the outset on your balances you don’t pay off in full each month, but you don’t need to worry about getting stung by higher rates after an interest free period expires.