What are 0% purchase credit cards, and why are they good for Christmas? We explain it all – and show you the best cards to go for.

• What are 0% purchase credit cards?
• Why they’re good for Christmas spending
• Should I apply?
• Find the best cards here

What are 0% purchase credit cards?

0% credit cards charge you no interest at all for a certain period – allowing you to spread the cost of your purchases over time (whether you’re buying one big thing or several smaller items). Some cards offer 0% for up to 15 months.

Who are these cards good for?

If you are disciplined, cards that offer 0% interest on purchases can be a real help if you want to spread the cost of buying something big, like a new car, a holiday, or simply your Christmas shopping.

It’s much better to use one of these cards than to go for a 0% finance deal in a shop. With your own 0% credit card you have a lot more control over the way you pay back the money.

Remember! To make the most of these cards, you should aim to pay the whole thing off before the 0% period finishes. That way, you ensure that you clear off all your debt without paying any interest on it.

(If you don’t manage to do this, try and switch the remaining debt to a 0% on balance transfers card instead).

If you’re really canny, you can even use a 0% purchase card to make you money. If you have the cash to cover the whole purchase, you could still buy the item (or items) with your 0% purchase card, then put the money into a high interest savings account and earn some interest on it until the end of the 0% period.

Purchase cards and Christmas spending

If you don’t have the cash to pay for your Christmas celebrations on the spot, a 0% purchase credit card can help.

Spending on 0% purchase cards is still getting into debt, so you need to limit your spending as much as you can. However, you won’t be paying any interest on your spending, so you’ll only need to pay back the exact amount you spend.

The key point here is plan your borrowing – make sure you budget for the amount you spend.

Just be sure you can pay the whole balance off before the end of the 0% period. You might think that with several months to pay off the debt, that’s not a problem. But by the end of the 0% period you’ll be gearing up for another Christmas, which you’ll have to pay for. So you don’t still want to be offloading last year’s debt!

The key thing is to control yourself and not just buy things on a whim because you can. Only buy the essentials you need for a fun Christmas and make sure you start paying off your balance immediately in the New Year.

Should I apply?

Not everyone is approved for these cards. And remember that each time you apply for credit and get rejected you get minus points on your credit rating ‘scorecard’.

Get a 30-day free subscription to Credit Expert and check your score before applying (just remember to cancel it at the end of the free period if you don’t want to continue with a monthly subscription).

If you find out that your score isn’t good or excellent, it’s probably best not to apply for one of these cards.

Go instead for a card with a low regular balance. Check here for the lowest standard rates. Or, even better, save up for the thing you want to get and then buy it!

The best 0% purchase cards

One of the best 0% purchase cards on the market at the moment is the Tesco Clubcard credit card.

You get 0% interest on purchases for a whopping 15 months – a perfect way to spread the cost of your Christmas shopping. (The representative APR is 16.9% APR after the 0% period ends).

A real bonus of this card is that it’ll earn you extra Clubcard points every time you use the card in any store – which you can then put towards paying for pressies and the Christmas food shop!

Apply for your Clubcard Credit Card here.

Marks & Spencer Money offers a similar deal, with 15 months at 0%. After the 0% period finishes, the representative APR goes up to 15.9%. You can collect points as you spend that are converted to M&S vouchers. (You only earn about £1 worth of vouchers for every £200 you spend though, so it’s not quite as generous as Tesco’s card.)

Apply for an M&S Credit Card between 3 November 2011 and 4 January 2012 and you’ll automatically receive 10 entries into their 1 million M&S points prize draw to win £10,000 to spend in M&S in the New Year (when your application is accepted).  You’ll also receive 1 entry into the prize draw each time you use your new M&S Credit Card this Christmas.

The Halifax All in One Card  doesn’t give you quite as long a period of 0% interest (only 13 instead of 15 months at 0% interest).

However, it does gives you 13 months 0% interest on purchases and balance transfers (3% handling fee applies). The rate of interest after the 0% period ends is 17.9% APR.

Getting started

• Tesco Clubcard Credit Card
  
• Halifax All in One Card
• M&S Credit Card
• Compare and choose other 0% credit cards here (select ‘o% purchase’ from the drop-down menu on the top-left)