Enjoy interest-free periods of up to 6 months with a credit card that offers you 0% p.a. on purchases.
A 0% purchase rate credit card can help you save on your shopping by charging zero interest during the promotional period. While the length of 0% introductory offers vary, it is usually between 3 to 12 months interest-free depending on the credit card you choose.
Use this guide to learn about the benefits of 0% purchase credit cards, how they work and how you can compare the different interest-free offers on the market. We also answer the most common questions about 0% purchase credit card deals to help you get the most out of your next credit card.
Compare 0% Purchase Credit Cards
What is a 0% purchase credit card?
A credit card with 0% on purchases allows you to make purchases interest-free for a promotional, introductory period. When this period ends, the standard purchase rate is charged for the remaining balance on your card. If you have some big-ticket purchases to make, a 0% purchase credit card can help you save on interest charges during the introductory period. This could help you pay off the balance faster.
How is a 0% purchase credit card different to a regular credit card?
While a standard credit card typically has an interest rate between 13% and 23% p.a. for purchases, credit cards offering interest-free purchases charge zero interest on all eligible purchases made during the promotional period.
How can I find the best* 0% purchase credit card?
There is no one best* 0% interest credit card on the market because each offer is designed to suit different spending habits and budgets. However, you can find a 0% purchase credit card offer that works for you by comparing the following features:
- Length of the 0% purchase promotional period. As a 0% purchase period can range between 3 to 12 months or more, it is important to choose a card with a promotional period that works for you. Consider how much you are going to spend, divide it by the number of months in the promotional period and calculate whether you can repay that much each month to clear the balance before the revert rate applies. If not, you may want to apply for a card with a longer promotional period or be prepared to collect some interest when the offer ends.
- Annual fee. Most 0% purchase credit cards charge an annual fee. To determine whether or not the card is worth the cost, consider how much you will save with the 0% interest offer and the other perks on offer to see whether the benefits outweigh this cost.
- Revert purchase interest rate. If you are unable to pay your balance in full by the end of the introductory period, your purchases then begin to attract the standard purchase rate. Depending on the card, this is typically between 13% and 23%. If you don’t think you can repay the entire balance before the promotional period ends, look for a card with a lower ongoing purchase rate. Otherwise, you could enjoy another interest-free period by transferring your debt to a card with a 0% balance transfer offer.
- Extra benefits. Does the card come with complimentary travel insurance? Do you want to earn rewards points on your purchases? Are your purchases covered by purchase protection and extended warranty? Can you access a 24/7 concierge service? If you will be using the card for more than the 0% offer, comparing these features can help set the cards apart.
Types of 0% purchase credit cards and extra features
While each of these cards offers 0% on purchases, there are several types of interest-free purchase credit cards. You can compare the additional benefits and features to determine which type of 0% purchase credit card is right for you.
| 0% purchase offer type | Benefits |
|---|---|
| Standard 0% purchase offer | Includes the 0% promotional purchase rate for a specified promotional period, which will revert back to the standard purchase rate once the offer has ended. Extra benefits such as interest-free days, travel benefits and complimentary insurances may also be available. |
| 0% purchases with frequent flyer benefits | Earn frequent flyer points for every dollar spent on your card for the life of the card and also take advantage of an interest-free purchase promotional period. |
| 0% purchases with balance transfer offers | This type of card allows you to transfer and repay your existing credit card debt interest-free whilst also making purchases with zero interest. |
| 0% purchases with rewards benefits | Pay no interest on your purchases and earn rewards points for every dollar you spend. Unlike a frequent flyer card, these are connected to your credit card’s rewards program and can be redeemed for flights, merchandise and cashback. |
What's the difference between interest-free days and 0% interest credit card offers?
Most credit cards offer you up to a certain number of interest-free days each statement period, for example, up to 55 days. To take advantage of interest-free days, you usually need to pay off your full balance by the due date on each statement. As long as you meet these conditions, you will enjoy interest-free days on your card.
By comparison, credit cards that offer a promotional 0% interest on purchases give you a temporary period when you can make purchases without paying any interest. You only have to make minimum payments during the promotional period. However, a standard interest rate will apply to any balance remaining at the end of that period.
4 common mistakes to avoid with 0% purchase credit cards
Want to get the most out of a 0% interest period? Here are four things to avoid:
- Ignoring the revert rate. At the end of the promotional period, the 0% interest rate reverts to the standard purchase rate (which usually sits between 13% and 23%). Make sure you consider the revert interest rate before applying for the card so you understand how your debt will grow if you fail to repay your balance before the standard interest rate kicks in.
- Only making the minimum repayment. You are required to make minimum repayments, usually 2% or 3% of the total balance, for each statement period. However, if you only pay the minimum amount each month, you will be unable to repay your entire balance before the 0% offer finishes. If you make more than the minimum repayment, you have a much better chance of repaying your balance before the revert rate applies and you start paying a higher interest rate. If you are unable to repay your balance before the 0% purchase offer ends, a balance transfer credit card may be the next step.
- Ineligible transactions. This type of 0% interest offer only applies to eligible purchases. If you use your card for balance transfers, cash advances, government payments or other cash-equivalent transactions, they are usually charged at the standard rate unless a separate promotional offer applies.
- Not taking advantage of the entire offer period. The 0% offer is available as soon as your card is approved, not from when you make your first purchase. So if your card offers a 0% offer for six months but you don’t make a purchase or any repayments for the first month, you only have five months to make repayments without incurring interest. If you have a big purchase in mind, make it as soon as possible and start making repayments immediately to get maximum value from the offer.
The introductory 0% interest period offered on these cards can be a great way to save money on planned purchases and big-ticket items you need to buy. When you are comparing these cards, pay attention to how long the promotional period lasts; what interest rate applies at the end of the promotional period; other features and fees so you can find one that suits your needs.