Updated: 02/08/2011

Need a bit of interest-free credit to help ease the financial pain of all that Christmas shopping? We’ve got just the thing. Here’s the lowdown of all the top 0% purchase cards, plus an explanation of how they all work and what to look out for. 

• What are 0% purchase credit cards?
• Should I apply?

Top deals

The best 0% purchase deal right now is the Tesco credit card. You get 0% for a full 15 months, plus 0% on balance transfers for the first nine months (subject to a 2.9% fee).  And if that wasn’t enough, you collect Clubcard points as you spend. Tyical APR is 16.9%.

Also Sainsbury’s Credit Card offers its shoppers 0% for the first 12 months for purchases in store and for other shopping. As with the Tesco card, you collect Nectar loyalty points as you spend. Plus you also get 12 months at 0% on balance transfers with a 3% fee. Typical APR is 16.9%.

The M&S Credit Card offers 15 months 0% APR on purchases and has a typical rate of 15.9% APR. They do not currently offer 0% APR on balance transfers.

The Halifax All in One card gives you 15 months 0% interest on purchases and balance transfers (3% handling fee applies). The regular rate of interest is 17.9% APR.

Next up is the Lloyds TSB Advanced Credit Card, which offers 6 months 0% on purchases. It’s not as long as the other cards, but the typical interest rate is lower at 11.9% APR.

The Post Office credit card is also a good one to consider. Not only does it offer three months at 0% on purchases as well as 0% on balance transfers for 14 months but also, unusually, does foreign transactions for free. Most credit cards charge about 2.5% every time you use them abroad, so if you’re off on holiday soon, this is definitely one to look at.

What are 0% purchase cards?

These are cards that will charge you no interest at all for a certain period of time when you use them to buy things.

You might buy one big thing that brings you up to your credit limit, or several smaller items. Whatever you purchase, you can spread the cost of paying for it over a few months.

Who are these cards good for?

IF (yes, that’s  a big ‘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.

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

To make the most of these cards, you should aim to pay the whole thing off before the 0% period finishes so that you clear the whole debt before you need to pay any interest on it.

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

If you’re really canny, you can even use one of these cards 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.

Should I apply?

Not everyone is approved for these cards. And remember that each time you apply for credit and get rejected it reflects negatively on your credit rating.

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 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!

Useful Links

• Halifax All in One Card
• M&S Credit Card
• Compare and choose other 0% credit cards here