The Best Interest-Free Credit Cards
This survey of 166 different credit cards reveals great 0% deals for spenders and borrowers.
Credit-card issuer Sainsbury's Bank has analysed 166 different credit cards to find the best introductory 0% (interest-free) deals available in the UK.
The bank's research revealed a huge difference in the length of introductory interest-free periods offered by leading credit cards. As the following table reveals, sixty-six cards offer an introductory interest-free period on new purchases (ideal for interest-free shopping and spending!), but all but six of these deals last less than ten months:
Introductory 0% deals on new purchases (for interest-free spending)
Length of 0% | No. of | % of total |
|---|---|---|
Up to three | 6 | 4 |
Four to five | 12 | 7 |
Six | 28 | 17 |
Seven to nine | 14 | 8 |
Ten or more | 6 | 4 |
Total | 66 | 40 |
As you can see, only six of the sixty-six cards have a "0% on new purchases" offer lasting ten or more months, with the average deal lasting around 6½ months. Naturally, Sainsbury's Bank's Standard and Platinum cards both fall into the Best Buy category; you can apply for the Platinum card via the Fool (it also provides discounts off purchases at Sainsbury's stores). So, if you need to spread the cost of a major purchase over ten months while avoiding interest, then this is a top card to choose!
By the way, at the annual Moneyfacts awards on 9 June, I saw Sainsbury's Bank pick up the award for "Best Credit Card Provider (introductory rate)" -- a seal of approval which is actually worth something for a change! The Fool's search engines are powered by Moneyfacts, which is the UK's leading provider of independent, unbiased financial data.
What's more, Sainsbury's Bank's survey revealed that borrowers need to tread carefully when moving their existing debts to 0% on balance transfers cards. Two out of five credit cards which accept 0% or low-rate balance transfers now charge a fee of up to 3% of the amount transferred (up to £30 per £1,000!), as the following table reveals:
0% balance-transfer fees
Balance-transfer | No. of | % of total |
|---|---|---|
2 | 51 | 31 |
2.25 | 4 | 2 |
2.5 | 8 | 5 |
3 | 3 | 2 |
Total | 66 | 40 |
The Sainsbury's Bank Advantage card doesn't charge transfer fees, although its 0% balance-transfer deal only lasts five months. However, the bank also offers a low lifetime rate of 5.94% on balance transfers to its Standard and Platinum cards, again with no transfer fee.
According to Moneyfacts, the longest 0% no-fee balance transfers come from Barclaycard (ten months, branch only), RBS/NatWest Gold/Platinum (nine months, branch only) and various charity cards issued by Halifax (nine months), plus you can still find a few no-fee 0% transfers lasting six months.
Finally, if you'd like to become a credit-card expert, then read How To Master Your Credit Cards. Here's to many years of interest-free borrowing to come!
More: Use the Fool to compare credit cards, compare personal loans and compare savings accounts!
Disclosure: Cliff owns shares in HBOS, which owns Halifax.
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