Santander 123 credit card adds market-leading 0% purchase offer

The Santander 123 credit card now comes with an 18-month 0% period as well as paying cashback on your spending.

The Santander 123 credit card now comes with an 18-month 0% period on purchases.

So the revamped card combines a market-leading interest-free period on spending with cashback on certain spending.

The best 0% purchase deals

If you have a big spend on the horizon, then getting a credit card with a lengthy 0% period can be a smart move. It means that you can pay the debt off in manageable chunks, safe in the knowledge that every penny of your repayments is going directly towards cutting the size of your debt, rather than on interest payments.

And as the table below demonstrates, there are currently plenty of significant 0% periods on offer.

As you can see, Santander now offers two of the three longest 0% deals around, one with cashback (but also an annual fee) and one just offering the 0% period on your spending.

Cashback

Before now the big selling point of the 123 credit card has been that it pays cashback on your spending. The exact rate you get depends on where you are using the card.

You get 1% cashback on your spending at supermarkets, 2% on spending at department stores and 3% on travel spending (at petrol stations and on National Rail and Transport for London).

This is a little different to other cashback credit cards, which tend to pay a flat rate no matter where you spend. For example, the American Express Platinum cashback card pays 5% cashback, capped at £125 cashback, in the first three months, followed by a rate of 1.25%. It comes with a £25 annual fee.

It’s interesting that both Santander and American Express (which has the Platinum Cashback Exclusive card) now offer credit cards a combination of lengthy interest-free periods on spending and cashback on your spending.

For a full rundown of cashback credit cards, read The best cashback credit cards.

Remember the fee

It’s very important to bear in mind that the Santander 123 credit card comes with a £24 annual fee.

You’ll need to work out for yourself how big a dent that will make into any cashback you earn with the card over the year.

A little bit of everything

If you want to get the most out of a cashback credit card – or any kind of reward credit card for that matter – it’s generally a smart move to put as much of your monthly spending on it as possible. That’s not an excuse to spend more than you usually do, but rather an opportunity to get rewarded for money that you would be spending anyway.

That’s still the case with the new and improved 123 credit card, but I think that getting the most of this card now requires a little more planning and discipline. Work out exactly how much you need to pay each month in order to clear your big purchase(s) off by the end of the 0% period.

Compare 0% purchase credit cards

More on credit cards:

The best cashback credit cards

The best 0% balance transfer credit cards

The best 0% purchase credit cards

The best reward credit cards