Enjoy the freedom of purchasing now and paying later. Compare credit cards with 0% on purchases for up to 15 months here.
A 0% purchase offer lets you spend on purchases now with zero interest for a promotional period. The 0% promotional interest rate can run for a number of days (between 44 and 55) per statement cycle or for a fixed number of months (between 3 and 15).
This guide explains what benefits 0% purchase credit cards offer, how they work and how to compare the different offers in the market. It also answers the most popular questions when it comes to 0% purchase offers.
Compare the different types of 0% Purchase Credit Cards in the market
What is a 0% purchase credit card?
Credit card offers with 0% on purchases allow you to make purchases and pay zero interest on them. These offers vary from up to 55 days interest-free to 15 months interest-free.
How is this different to a regular credit card?
While a standard credit card typically has an interest rate between 13% and 20% p.a., a 0% card offers zero interest on all purchases made during a promotional period.Back to top
How to compare 0% purchase credit cards
There are many 0% purchase credit card offers on the market, so it’s important to compare your options to find the right one for you. Some of the features you should compare to distinguish between cards include:
- Introductory 0% interest rate term. Consider the length of the promotional period and calculate whether you can repay your balance before the end of the promotional period.
- Revert purchase interest rate. If you’re unable to pay your balance in full by the end of the introductory period, your purchases will begin attracting the standard purchase rate. Depending on the card, this will probably be between 13% and 20%, meaning that you could end up paying a lot in interest on any remaining debt after the introductory period. If you have any balance remaining after the 0% promotional period, you can repay this amount interest-free by using a balance transfer credit card.
- Interest-free days. Some cards offer interest-free days on purchases for a set period (usually up to 55 days). While the 0% on purchases is a temporary offer only available over the promotional period, interest-free days are usually a permanent feature of the card. So if you intend to use your card beyond the 0% promotional offer, you’ll need to repay your balance in full each month to take advantage of the interest-free days
- Annual fee. Most 0% purchase cards charge an annual fee. To determine whether the card is worth the cost, consider how much you’ll save with the 0% interest offer and the other perks on offer to see whether the benefits outweigh the cost. If not, you’ll want to consider another card.
- Extra benefits. Does the card come with complimentary travel insurance? Will your purchases be covered by purchase protection and extended warranty? Can you access a 24/7 concierge service? If you will be using the card for more than just the 0% offer, comparing these features can help set the cards apart.
Types of 0% purchase credit cards and extra features
|0% purchase offer type||Benefits|
|Standard 0% purchase offer.||Includes the 0% promotional purchase rate for a specified promotional period, which will revert back to the standard purchase rate once the offer has ended. Extra benefits are also available with interest-free days, travel benefits and complimentary insurances.|
|0% purchases with frequent flyer benefits.||Enjoy the high flyer perks and earn frequent flyer points per $1 spent with zero interest on purchases at home or overseas.|
|0% purchases with balance transfer offers.||This type of card allows you to transfer and repay your existing credit card debt interest-free whilst making purchases with zero interest.|
|0% purchases with rewards benefits.||Pay no interest on your purchases and earn rewards points for every $1 you spend. Redeem for various rewards including flights, retail items and lifestyle upgrades.|
How do 0% purchase credit cards and interest-free periods on purchases work?
0% purchase credit cards offers allow you to make interest free purchases for a specific period of time, avoiding being charged the regular purchase interest rate.
Credit cards without a 0% purchase offer can provide interest-free days on purchases, if you repay your balance in full by the statement date. If you have an outstanding balance then your purchases will be charged at the purchase interest rate. Please refer to the diagram below for an explanation on interest-free days.
TIP: It would also be crucial to clear the balance before the sixth month otherwise you will get charged interest in month seven immediately as you will be starting the month off with a balance.Back to top
4 common mistakes you want to avoid with 0% purchase credit cards
- Ignoring the revert rate. At the end of the promotional period, the 0% interest rate will revert to the standard purchase rate (which usually sits between 13% and 20%). Make sure to consider the revert interest rate before applying for the card so you understand how your debt will grow if you fail to repay it before the revert rate kicks in.
- Only paying the minimum repayment. You’ll be required to make minimum repayments, usually 2% or 3% of the total balance each statement period. However, if you only match the minimum amount each month, you’ll be unable to repay your entire balance when the 0% offer finishes. If you pay more than the minimum repayment, you’ll have a greater chance of repaying your balance before the revert rate applies and you start paying a higher interest rate. If you’re unable to repay your balance before the 0% purchase offer ends, there is still a way to save on the interest (if necessary), and a balance transfer might be the next step.
- Ineligible transactions. The 0% offer only applies to eligible purchases. If you use your card for balance transfers, cash advances, government payments and other cash equivalent transactions, they’ll be charged at the standard rate unless a promotional offer applies.
- Not taking advantage of the entire offer period. The 0% offer is available as soon as your card is approved, not from when you make your first purchase. So if your card offers a 0% offer for six months but you don’t make a purchase or any repayments for the first month, you’ll only have five more months to take advantage of the offer. If you have a large purchase in mind, make it as soon as possible to ensure you get maximum value out of the length of your offer.
0% purchase credit card vs. standard credit card – How much you can save
This table provides an example to how much you can save when you make purchases with a 0% purchase offer, comparing a 0% purchase credit card with a standard purchase rate credit card.
|NAB Premium Card (0%)||NAB Qantas Rewards Card (Standard)|
|Purchase rate (p.a.)||0% p.a. for 15 months||19.99% p.a.|
|Repayment period||15 months||15 months|
|Total interest paid over 15 months||$0||$499.75|
Charge cards as 0% purchase credit cards
Charge cards work in a similar way to credit cards, but you need to pay back the entire balance back by a certain date. This is usually by the end of the month. No interest is if you pay the whole balance by the end of the month, and if you don’t pay it all back by the due date then you’ll be liable for a whole range of fees and charges.
Spend per month
Interest rate on purchases
Difference in interest
As you can see from the case study, it may be more beneficial to use a charge card for your purchases, as the interest you pay with a credit card is more than the annual fee. However, you need to remember that a credit card needs to suit your personal and financial situation — so if you know you cannot pay back the balance in full at the end of every month, then a charge card may not be for you.
The most popular questions about 0% purchase offers from our users
Does the 0% purchase offer apply for overseas purchases/ on holiday?
Overseas purchases will not be charged any interest during the promotional period. However you may be charged foreign currency conversion fees. You can compare credit cards which do not charge currency conversion fees here.
How many purchases will receive the 0% interest rate?
All purchases made during the promotional period will not be charged any interest (you can make purchases up to your approved credit limit). 0% purchases can be made from when you activate the card to the end of the promotional period. E.g. If the purchase promotion provides 0% for 15 months, a purchase made in the 12th month would receive 1 month interest-free.
When does the 0% purchase promotion start?
The 0% promotion will begin either when your credit card application is approved or upon credit card activation, depending on the bank. It generally will take 3-5 business days for your card to be mailed to your address after application approval.
What types of transactions are eligible to receive 0% interest?
Your transactions need to qualify as an ‘eligible purchase’ to be covered under the 0% purchase promotion. Eligible purchases are generally defined as everyday purchases which involve the exchange of a good or service for a payment. Transactions that do not qualify as eligible purchases generally include the following: business expenses, gambling transactions and cash advances. If you are unsure about whether your transaction will qualify, the best solution is to contact your bank directly.
What is the interest rate after the 0% promotional period?
After your 0% purchase promotion has finished, the balance outstanding on purchases made will be charged interest at the regular purchase rate also known as the ‘revert rate’. You can also consider moving your outstanding purchase amount/ debt to a balance transfer credit card which will allow you to repay your debt interest free.
Do interest-free days apply during a 0% purchase promotion?
During the entire 0% purchase promotion period, interest-free days will not apply since no interest is charged on purchases during the promotion.
Do I have to make any repayments with a 0% purchase promotion?
Yes. You must make the minimum monthly repayment of the credit card even with a 0% purchase promotion available. This repayment is generally around 2-3% of the full outstanding balance, or a set dollar amount if the outstanding balance is approximately under $25.
Can I pay my bills or government payments with no interest?
Banks generally exclude bill and government payments from eligible purchases so they will not receive 0% interest. If you would like to inquire further, contact your bank’s customer service team directly.