The seven best interest-free credit cards for purchases and balance transfers

Robert Powell takes a look at credit cards with lengthy interest-free periods on both new purchases and balance transfers.

It’s debatable whether there’s ever a perfect time to take on debt. But if there is, now is probably it.

Interest-free periods on both purchase and balance transfer credit cards have been increasing over the past year or so. According to Moneyfacts.co.uk, the average terms for both 0% balance transfer credit cards and 0% purchase credit cards have increased by 11% since January 2010. This has in turn injected a dose of competition into the market for all-round cards.

Rachel Springall, spokesperson for Moneyfacts.co.uk, says: “There has been an increase in the number of combination cards launched into the market that offer an extended period of interest-free days on purchases and balance transfers over the last year.”

The market leader

The card with the lengthiest interest-free terms on both purchases and balance transfers is Nationwide’s Select Credit Card. The deal has a huge 18 months at 0% on purchases and 17 months at 0% on balance transfers. If you do make a balance transfer, you’ll have to pay a 2.95% handling fee (£5 minimum).

The card also pays 0.5% cashback on all sterling purchases and boasts unlimited commission-free purchases while overseas.

But there is a catch.

The catch

To be eligible for this market-leading deal you will have to hold a Nationwide FlexAccount with a Visa debit card. From here, you’ll need to pay in £750 or more each month (excluding internal transfers) or agree to an Account Transfer from a non-Nationwide account using the building society’s transfer service (or have done so in the past four months).

But as far as current accounts go, you could do far worse than this Nationwide offering.

The FlexAccount has an agreed overdraft at 18.9% but no in-credit interest rate. However its real selling point is the extra benefits thrown in by the building society. The account offers free European multi-trip travel cover (providing you continue to pay in £750 per month) as well as access to existing customer deals on loans, home insurance, mortgages and savings accounts.

Best of the rest…

If you don’t fancy switching current accounts, here are some other top all-round credit cards to rival the Nationwide deal.

Halifax’s All in One MasterCard is next best deal boasting 15 months at 0% on balance transfers and purchases, followed by Barclaycard and Virgin Money offering 14 and 13 months 0% across the board respectively. All three of these cards are available to new customers. However as they are all top-of-the-market deals, you will in all likelihood need a relatively spotless credit rating to be accepted.

Supermarket credit cards are also worth a look-in, especially if you intend to utilise your flexible friend for shopping. Sainsbury’s offers 12 months at 0% across the board on its shopper card. However if you’re aiming to boost your Nectar balance you should opt for the regular Nectar credit card. This account allows you to earn double points for the first two years on Sainsbury’s shopping and one point for every £5 spent elsewhere.

Tesco’s Clubcard MasterCard has a competitive 15 months at 0% on purchases and nine on balance transfers. This deal offers one Clubcard point for every £4 spent anywhere in the world along with the regular one point for every £1 spent in Tesco.

The golden rule!

Whichever card you go for, you need to ensure you clear off your balance before the 0% period runs out. Interest-free cards can be a good way to spread the cost of purchases and reduce rates on debt. But they only benefit the holder if used correctly, as if you allow the card to lapse past the 0% period, you could find yourself sucked into a costly spiral of interest charges.

More: Fees rising on 0% balance transfer credit cards | Earn top cashback from your credit card