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.
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
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.
Popular questions about 0% purchase credit card offer from our users
As long as it is an eligible purchase, overseas purchases are not charged any interest during the promotional period. However, you may be charged foreign currency conversion fees. You can compare credit cards which do not charge currency conversion fees in our detailed guide.
All eligible purchases made once the card is activated until the end of the promotional period will not collect any interest. However, any remaining balance that isn’t repaid by the end of the promotional offer will start to collect interest.
Please note that ineligible transactions (such as cash advances or balance transfers) accrue the standard relevant interest rate.
Credit card annual fees are usually not considered eligible purchases. If you get a promotional 0% purchase rate credit card, that also has an annual fee, you are usually charged interest on that part of your balance. You can check with a specific credit card provider to find out if this fee is eligible for the interest-free promotion. Alternatively, you may want to consider cards that offer no annual fee.
Credit cards that offer 0% interest on purchases may be useful in a number of different scenarios. For example, if you make a major purchase, or have a lot of holiday spending to do, getting a 12-month interest-free credit card could give you the flexibility to pay off your spending over time while avoiding interest charges.
Another example is if you want to earn more rewards or Airpoints on a credit card. Usually ,these points are offered per NZD$1 spent and some cards also offer bonus points if you meet a specific spending requirement. Either way, if you have a card with a promotional 0% purchase rate, you will earn more points without paying interest during the introductory period.
If you are interested in a 0% purchase credit card, remember that the interest-free period is temporary. Aim to pay off your balance before the end of the introductory period, as this will help you get the most out of your card.
The 0% promotion begins either when your credit card application is approved or upon credit card activation, depending on the bank. It will generally take 3-5 business days for your card to be mailed to your address after application approval. If you want to take advantage of the full promotional period, need to remember the offer period begins when you open the card rather than when you make your first purchase.
With this type of credit card, the promotional 0% interest rate is available for a fixed amount of time. For example, let’s say you got a card offering 12 months’ interest-free on purchases from when you activate the card:If you make a purchase on the day you receive your card (and activate it), you have 12 months to pay it off before interest is charged.
If you then make another purchase after 3 months, you have 9 months remaining on the 0% interest period.
Making a purchase 11 months after getting the card, you only have 1 month interest-free for that purchase.
After this, your 12 months interest-free offer ends and the interest rate reverts to the standard purchase rate for that card.
Your transactions must qualify as “eligible purchases” to be covered under the 0% purchase promotion. Eligible purchases are generally defined as everyday purchases which involve the exchange of goods or services for a payment. Transactions that do not qualify as eligible purchases generally include business expenses, gambling transactions, balance transfers and cash advances. If you are unsure about whether your transaction qualifies, contact your bank directly to find out.
For the length of the 0% purchase promotion period, standard interest-free days offers do not apply. If your card comes with an interest-free days feature (say, for up to 55 days), then you are able to take advantage of this when the promotional period ends. Note, this type of interest-free day period usually only applies if you pay your entire balance in full by the due date on each statement.
Yes. You must make the minimum monthly repayment on a credit card with a 0% purchase promotion available. This repayment is generally around 2-3% of the full outstanding balance, or a set dollar amount if the outstanding balance is below a certain level (often $25). Please note that paying the minimum monthly repayment isn’t usually enough to repay the entire balance before the promotional period ends. If you want to avoid collecting the standard interest rate, try to pay as much as you can each month to ensure the debt is paid in full before the standard interest rate applies.
Banks generally exclude bill and government payments from eligible purchases, so they are not considered an interest-free purchase. If you would like to inquire further, contact your bank’s customer service team directly.
Alison is an associate editor for Finder. As an editor and proofreader, Alison has found an outlet for her love of the written word. As well as constantly reading, Alison can be found caring for her menagerie of animals in her spare time.
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