0% Purchase Credit Cards – Compare 0% Purchases Credit Card Offers
Guide to 0% Purchases Credit Cards
0% purchases credit cards are quite simply credit card accounts where the credit card issuer offers to charge a discounted interest rate of 0% for an introductory period of time. This is usually set at around 5 or 6 months before the interest rate on any balance you have outstanding reverts to whatever the standard purchase rate or cash rate is on that particular card.
These types of 0% purchases credit cards are ideal for those people who know they need to make a larger purchase, or spend a larger than normal amount of money, that they know they won’t be able to afford to pay immediately with savings. Ideally, anyone who needs short term financing could find a benefit in these particular credit card accounts.
Comparison of 0% Purchases Credit Cards
Featured 0% Purchase Rate Credit Card
The Citibank Clear Platinum Credit Card offers a very competitive low interest on balance transfers, cash advances and purchases. Plus take an advantage of 2 for 1 movie deal for 1 year.
- $99 annual fee
- 0% p.a. for 6 months (reverts to 11.99% p.a.) on purchases
- 0% p.a. for 6 months on balance transfers
- Cash Advance Rate of 0% for 6 months thereafter reverts to 21.74% p.a.
- 55 days interest free
- Minimum Income Requirement of $35,000 p.a.
Before You Submit an Application for a 0% Purchases Credit Card…
Before you apply for any kind of 0% purchases credit card offer, always take the time to do a little research. Comparing the various offers available can help to give you a clearer idea of what’s available and which card might suit your personal needs best.
Take the time to compare what other credit card companies are offering and see how your own bank measures up to these offers.
When you apply for any credit card, you must meet the minimum age requirements (typically 18 years old), the minimum annual income, and of course have a good credit history.
Things to Consider with a 0% Purchases Credit Card Offer
There are some factors you should consider carefully before you apply for a 0% purchases credit card.
Introductory 0% Interest Rate Term
Check carefully how long the 0% offer will extend and when it’s due to end. If the offer you’re considering lasts for only three months, you may find you still have an outstanding balance to repay that will be attracting a much higher interest rate once that 0% term ends. Obviously, you’ll want a longer introductory term, as this will give you a longer period of time to repay the money you spend.
Standard Purchase Interest Rate
Take a moment to find out what the standard purchase interest rate will become once your 0% purchases credit card offer expires. This can be important, especially if you do realise that you’ll have at least some balance remaining after the introductory period ends.
In many cases, you’ll find that the rate you receive after your 0% interest rate ends will be significantly higher. If you’re still carrying a balance when this happens, you could find that those interest charges can mount up to quite a lot more money than you thought you were going to pay.
You may also find you need to pay for other purchases using that same credit card at a later date. Knowing what the usual interest rate is going to be once the 0% rate finishes can be an important factor in making your decision.
For this reason, finding out what the normal purchase rate will be after the special offer has ended can be very important. If you know you’re the type of client who is very likely to carry a balance on your credit card from month to month, look for a credit card that has a low ongoing purchase rate.
Of course, if you’re the type of client who is likely to repay normal monthly purchases every month before the due date, you could benefit from the ongoing interest free days offered by your credit card provider. In this case, the ongoing interest rate really won’t make much difference.
Just be sure you’re being totally honest about what kind of credit card customer you are before you make your decision about which card will be right for you.
Annual Fee
Most 0% purchases credit cards will charge an annual account fee. While the annual fee might be a little higher on rewards cards with a 0% purchases offer, you could find there are other perks and extras attached to the account that could be worth paying the added annual cost to receive.
Take the time to check how much the annual fee cost may be and consider carefully whether it’s worth the added expenses or not. A high annual fee could end up negating all the benefits you thought you were getting on a zero percent credit card.
Interest Free Days
Most credit cards offer interest free days on purchases that are usually displayed as up to 45 days interest free on purchases’ or something similar. While you won’t need this during the 0% interest rate introductory period, you may be able to benefit from it after that initial offer expires.
For the first six months, you could be benefiting from that ongoing 0% interest rate available during the introductory period. However, after that time, you will need to be more disciplined about your spending habits and repayment patterns in order to continue paying no interest on your credit card.
If you can manage to repay your entire credit card balance in full every month before the due date, you can then benefit from those interest free days. You’re able to pay for purchases at the beginning of the month and then spend the rest of the month repaying them without attracting any interest charges. As long as those payments you make through the month add up to enough to cover the amount you spent and they’re in by the due date, you’ll still have an interest free credit card.
Rewards Programs
Many people are tempted to sign up for various credit cards because of their rewards programs. Unfortunately, if your only reason for applying for a 0% purchases credit card is to pay for a large purchase and then hopefully pay off that balance again, you may not get the benefits you thought.
Always take the time to check whether the rewards program you’re considering will be compatible with your own financial goals and spending habits. Besides, some of those rewards programs can carry extra fees and charges you may not want to pay for if you don’t intend on using them.
Of course there are some cards that may have associated rewards available that offer bonus reward points for using them with their own stores and affiliated partners.
Perks, Benefits and Features
Always take the time to check what other perks might be available on different 0% purchases credit cards. For example, upgrading to a Gold card or even a Platinum card could mean receiving some extra benefits not available on most of the classic credit card accounts.
Some of these perks could include complimentary travel insurance, accident insurance, extended warranty, purchase cover protection and even a personal concierge service.
If the reason you wanted a 0% purchases credit card was to pay no interest on that big-screen TV you wanted to buy, then having purchase cover protection and an extended warranty on that item could come in very handy if something goes wrong.
Of course, there are times when upgrading your card might not suit your own personal financial situation. The only way you’ll know this is to take the time to compare the offers available and make sure they will suit your own particular needs.
Your Own Repayment Reliability
If you know you’re the type of customer who sometimes forgets about the repayment due on your credit card bill, or sometimes forgets about the due date, then a 0% purchases credit card might not be the right account for you.
Before you submit an application for any kind of 0% offer, always be certain you’re able to afford at least the minimum repayment due on or before the due date each month. This is important as you may find your zero percent interest rate can be ended if you miss the due date on any of your monthly payments and your rate will immediately revert to the higher standard purchase interest rate.
You may also find you’re charged with a fee for late repayments. Some credit card providers may also begin to charge penalty interest as well.
Know Your Budget for a 0% Purchases Credit Card
Assume you wish to buy a large appliance, like a fridge or washing machine. For the purpose of this example, we’ll assume you want to spend $1,500 on your purchase. If you apply for a 0% purchases credit card, you have the opportunity to purchase that appliance interest free.
However, this will only be true if you know you can reasonably afford to repay the entire amount you spend before the 0% interest rate period expires.
So if your introductory term is 6 months and you spend $1,500, you will need to repay at least $250 per month on that card to make sure you don’t end up being charged interest on the remaining amount.
Repaying only the minimum amount shown on your statement will ensure to your credit card provider that you really will still have a balance remaining when your 0% interest rate ends.
Minimum Payment Due
Keep it firmly in mind that your monthly statement will show you only the minimum payment amount due. This amount will not help you to clear your entire balance before the 0% interest rate expires. It’s simply the bare minimum you need to pay in order to keep your account running at the agreed zero percent interest rate during the introductory period.
However, you should work out the real amount you should be paying over and above that minimum payment to make sure you really will repay the amount you spent before that 0% interest rate turns into a higher interest rate.
Always take the time to do a basic calculation of how much you’ll need to pay every month to pay off your balance in full.
If your 0% purchases credit card offer extends for 6 months, then divide your purchase amount by 6 and pay at least that amount every month until your balance is gone.
Things to consider with a 0% Purchases Credit Card
If you’re shopping around looking for a zero percent credit card that is specifically designed for purchases, keep some things in mind:
Cash Transactions
If you’re really short of money and you know you have a 0% purchase credit card in your wallet, you might be tempted to withdraw cash from your account using an ATM.
Unfortunately those cash transactions are often viewed by credit card providers very differently and may attract interest from the day the transaction was made. This means any benefits you thought you were getting from your 0% purchases credit card may be reduced.
Check for the types of “˜Purchases’ Count As 0% Transactions
If you were to pay for groceries or pay a utility bill with your 0% purchase credit card, these items would ordinarily count as valid transactions. You really won’t pay any interest on them for the term of the introductory offer.
However, there are some ‘purchases’ that credit card providers don’t classify as being eligible for the 0% interest rate.
These are the transactions deemed to be ‘cash transactions’ and they include buying traveller’s cheques or foreign currency. You may also find that if you wanted to spend a night out at the casino with friends and you decided to buy some playing chips with your credit card, this will also be classified as a ‘cash transaction’.
If you make any kind of cash transaction during the 0% introductory term, you will be charged interest at the cash advance interest rate on the amount you spent for that transaction.
Getting the Most Out of 0% Purchases Credit Cards
The people who stand to benefit the most out of 0% purchases credit cards are those who are fully aware of the options and offers available and have compared the deals properly.
These people will know exactly how much they intend to spend and how much they can afford to repay. They’ll also know what the interest rates and other associated costs will be on the card they’ve chosen. They’ve spent time comparing different offers to learn about how each different credit card provider may charge interest and account fees. Then they worked out which one will suit their own personal needs best.
If you know you’re going to be paying for purchases and you need short term finance, make your purchases early. You only have 6 months to repay what you spend, so you might as well make the most of the time you have available.
Buy what you need soon after your account is opened and then work hard on making sure you pay back the amount you spent. Ideally, you’ll repay the entire amount before the 0% interest rate expires.
As soon as your credit card no longer allows you the benefit of a 0% interest rate, work hard to try and figure out a way to take advantage of the card’s interest free days.
Pay your bills and buy your groceries or fuel at the beginning of the statement cycle. Then work on repaying everything you spent before the due date that is shown on your statement.
Of course there will be months where you might carry a small balance over into the next month. If this sounds like something that you might do from time to time, aim at shopping around for a credit card with the lowest possible ongoing purchase interest rate you can find. This will help keep your interest costs to an absolute minimum and save you money at the same time.
Overall, 0% purchases credit cards can be a great financial tool if used wisely.
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