0% Balance Transfers & 0% Purchases Credit Card
Have an existing credit card debt and need to make purchases? Compare 0% p.a. balance transfer and 0% p.a. purchase offers here.
These offers are about as exciting as credit card deals get, providing credit cardholders with interest relief on their debt. The purpose of a 0% p.a. balance transfer and 0% p.a. purchase credit card is to pay off an existing credit card debt while being able to make interest-free purchases.
How to use a 0% p.a. balance transfer to manage post-Christmas debt
How do 0% p.a. balance transfer and purchase rate credit cards work?
To understand what this all means, we need to look at what can happen when the 0% p.a. offer is only on a balance transfer.
Purchases typically attract interest with a balance transfer offer.
Balance transfers are a great offer and their popularity is a testament to this. One trap people can fall into on a regular balance transfer card is by using it to make purchases. The reason purchases cause an issue is because there are no interest-free days on credit cards with a balance transfer, so you have to pay interest on the recent purchase. This isn’t an ideal situation for people who are making an effort to get out of debt.
0% p.a. purchase and 0% p.a. balance transfer cards let you repay your debt and purchase interest-free.
The combination of a 0% p.a. balance transfer and 0% p.a. purchase card solves this consumer pitfall by eliminating the possibility of consumers being stung with interest on purchases during the introductory offer period. For cardholders, with a normal balance transfer offer, the latest credit card reforms require banks to allocate payments to the higher-interest debt first. It works this way: the debt on your credit card will be paid off in a certain order, with the highest interest rates first. Customers who may think they are putting a massive dent in their credit card debt are paying off their new purchases first; and are being less effective at paying off debt than they intended.Back to top
How to compare 0% p.a. balance transfer and 0% p.a. purchases credit cards
When comparing 0% p.a. balance transfer and 0% p.a. purchases credit cards, make sure you identify the type of card most suited to you.
Here, we examine the main features of these cards; what you should be looking for and why you should understand how certain factors can work against each other.
Types of 0% p.a. balance transfer & 0% p.a. purchases credit cards
No two 0% p.a. balance transfer and 0% p.a. purchase credit card offers are the same. They are available across a variety of cards, so annual fees, revert interest rates and the class of the card can help set your alternatives apart.
- Rewards cards. A rare beast to carry this type of offer. Generally only trimmed-down rewards cards will have the full 0% p.a. on balance transfers and 0% p.a. on purchases. So, you can expect to get complimentary insurance and other helpful, low-key privileges.
- Reduced annual fee for first year offer. Even a cursory glance at the above comparison table will show many of the 0% p.a. balance transfer and 0% p.a. purchase rate offers have a reduced annual fee for the first year. This can be very helpful for customers who wish to keep their upfront costs low while they knuckle down to pay off their debt.
- Platinum cards. Platinum credit cards are a class, or category, of credit cards that are targeted at higher income customers than classic credit cards and often require a sharp credit record. In return, customers get higher credit limits as well as more valuable extras, which can include complimentary overseas travel insurance.
- Classic cards. Classic credit cards are a good option for people on a lower income than required by platinum credit cards. They are usually a no-frills option and therefore tend to have lower annual fees than platinum credit cards.
- Low rate cards. Low rate credit cards are a pretty strong offer in the 0% p.a. balance transfer and 0% p.a. purchases scene, as purchases on the cards revert to what is usually a relatively low purchase interest rate.
How to use 0% p.a. balance transfer & 0% p.a. purchase rate credit cards wisely
Your 0% p.a. balance transfer and 0% p.a. purchases credit card will be a huge boon during its initial offer period, but only if you make effective use of it. Here are the main do’s and don’ts of using this particular credit card to keep in mind before you apply:
The do’s of 0% p.a. balance transfer and 0% p.a. purchases cards
- Make your balance transfer quickly. Though the introductory period may last a number of months, your opportunity to make the transfer may be limited to a shorter period (such as within the first thirty days), otherwise the promotional rate is lost. The longer you leave it, the less time you have to enjoy avoiding interest. Take advantage of the offer by transferring your balance how to make the transfer. As mentioned already, the easiest way is during your application. Otherwise, you can apply online, over the phone or via paper forms in the mail once your card arrives.
- Pay off your balance in good time. If your deal is for six months, that is not an awful lot of time. Make sure you budget like mad to ensure the balance on your 0% p.a. balance transfer and 0% p.a. purchase credit card is paid off in full before the offer period expires. You will be charged the regular rate of interest on any unpaid balance, which could be as high as 23%. However, if you can’t get there by the cut-off date, it may be worth considering a balance transfer to another balance transfer credit card.
- Don’t think this can become a habit. Making one 0% p.a. balance transfer after another to avoid paying your debts will be noted in your credit history. Your credit rating can drop due to regular credit applications and those assessing your credit file may well read into your habits and reject your applications.
- Don’t make any cash transactions on your 0% p.a. balance transfer and 0% p.a. purchases card. Cash transactions aren’t often included in 0% p.a. promotional offers, and when they are they still carry very expensive cash advance fees.
Things to watch out for when using this type of credit card offer
- Revert interest rates. Cardholders need to be aware of the spike in interest they can expect at the end of the promotional offer. The balance transfer amount will revert to either the higher cash advance interest rate or the purchase rate. If you know the balance won’t be paid in full by that time, you may want to consider swapping cards or at least how you will budget. Rates on new purchases will revert to the purchase interest rate at the end of the introductory period.
- Cash transactions. This is never a good idea on any credit card and unlikely to be covered by any 0% p.a. deal. Even if they are, there will still be a cash advance fee for every cash advance transaction. This is an extra charge of around 2to 4% of the transaction amount. If the cash advance fee is unpaid by the next statement due date, it will accrue interest as well at the cash advance rate.
- Different length offer periods. The length of these offers can vary, so it is worth deciding from the outset what your plans are for when the period ends; and whether a longer balance transfer and purchase period suits you, even if the offer interest rate is higher than some of the shorter, 0% p.a. offers.
- Annual fee. Check this is not too much higher than average. A Slightly higher than normal fee may be okay for the benefits you are gaining from your 0% p.a. balance transfer and 0% p.a. purchase offer.
- Minimum monthly repayments. Although you want to pay your credit card balance in full each month when possible, your monthly minimum payment can be a good indicator of how high your current outstanding balance is. By being prepared for your minimum monthly repayment you can also help avoid late fees, which can be around $30-$40 for some cards. Calculating your own minimum monthly balance repayment is as simple as looking at what your minimum percentage repayment is and how much your outstanding balance is (interest included). You can also use an online, credit card repayment calculator to tell you what your minimum monthly repayments will be by looking at your current balance and credit card interest rate.
Frequently Asked Questions
Yes, there were such offers at the time of writing. However, offers change from time to time, so the best way to stay up to date with the latest offers from providers is to check our balance transfer comparison page.