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Promotional purchase rate credit card offers

Understand how credit card purchase rate offers work – and how they can help you save on interest costs.

Updated

If you’re planning to use a credit card to pay for a big short-term expense such as a wedding, a vacation or Christmas shopping, then a card with a low or 0% interest rate on purchases could be a useful tool for you. While promotional purchase rate offers have the potential to help you save on interest charges, they only offer the low purchase rate for a limited period of time.

Compare credit cards with purchase rate offers

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
Tangerine Money-Back Credit Card
1.95% intro APR for the first 6 months, 19.95% thereafter
19.95%
$0
$12,000
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
Scotia Momentum No-Fee Visa Card
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
$12,000
Get 1% cash back on all eligible gas station, grocery store and drug store purchases and recurring bill payments, and get 0.5% cash back on all other eligible purchases.
Get a 7.99% introductory interest rate on all eligible purchases for the first 6 months. Apply by February 28, 2021.
Scotia Momentum Mastercard
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
$12,000
Get 1% cash back on all eligible gas station, grocery store and drug store purchases and recurring bill payments, and get 0.5% cash back on all other eligible purchases.
Get a 7.99% introductory interest rate on all eligible purchases for the first 6 months. Apply by February 28, 2021.
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How do promotional purchase interest rate credit cards work?

Purchase rate credit cards provide you with a promotional low or 0% APR on purchases for an introductory period. For example, you may find a card that offers a low rate of 7.99% APR on purchases for six months. This means that any eligible purchases you charge to your credit card during the introductory period of six months – which begins once the card is activated or once you’re approved for the card – will accrue the promotional interest rate.

At the end of the promotional period, any remaining balance from your purchases will be charged the standard variable interest rate for that card. So, if your standard APR on purchases is 19.99%, any unpaid balance and any future purchases will accrue this new interest rate.

Does the introductory purchase rate apply to all of my transactions?

As the name suggests, a promotional purchase rate credit card gives you a deal on eligible purchases only. Ineligible purchases often include cash advances transactions and gambling purchases, as well as any balance transfers.

When does the promotional purchase rate start?

The promotional offer will begin either from the time the card is activated or from when you’re approved for the card. If the purchase rate promotion begins from the time you’re approved, you’ll miss out on the special interest rate for a week or two while your card is sent to you in the mail. You can find information about when the purchase rate promotion begins by reading the fine print or by contacting the provider.

If your card has a six-month promotional period on purchases and you make your first purchase a month after being approved for the card, you would only have five months left to pay off the balance before the standard rate applies. So, if you have a big purchase in mind and want to make the most of the promotional interest rate, you should make the purchase as soon as possible after being approved for the card, in order to give yourself more time to pay it off before the standard interest rate kicks in.

How long does the promotional offer last?

These types of deals are introductory offers and last for a limited time only – which is usually between six and 12 months, depending on the card.

Before you apply, consider how much you’ll need to pay each month to pay off your balance in full before the promotional period ends. If you don’t think you’ll be able to repay your balance before the promotional offer is over, you might want to look for a card with a longer promotional period or consider transferring your debt to a balance transfer credit card.

What happens to my balance after the introductory purchase rate ends?

At the end of the introductory purchase period, any unpaid balance from the promotional period will accrue interest at the standard purchase rate of interest which usually sits between 12% and 20%. Any purchases you charge to the credit card from then on will also accrue interest at the standard purchase APR for that card.

Bottom line

If you’re about to make a big purchase or you’re simply looking to carry a balance on your credit card for a few months, a credit card offering a promotional purchase rate might be a good solution. However, it’s important to remember that the low or 0% purchase rate is only available for a limited time and a higher revert rate will apply on any remaining balances and future purchases.

If you want to get the most out of your promotional purchase rate credit card, make your purchase early on, pay more than the minimum repayment each month and make sure you’ve paid down the entire balance before the promotion ends.

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