0% Credit Cards
Posted January 21st, 2009 Zero percent credit cards are a fairly new development in the financial market but are becoming more common as banks and retailers try to get people to spend more money.
When you’re looking for a zero percent card, you’ll see a lot of them out there and you may think they’re all pretty much the same. Nothing could be further from the truth! Some are strictly balance transfer cards meant to consolidate the balances from your credit cards. This can save you quite a bit of money! There are also zero percent cards that act as regular credit cards but do not charge you interest on the purchases.
There are several things you’ll need to pay attention to when shopping around for 0% credit cards. The first is the initial fee charged, which can be as much as 3-5% of the total amount that you transfer to the card. If you’re not transferring a balance but merely getting the card for future purchases, find out if an annual fee will be charged.
Be sure that you know the terms and conditions of the card you choose. If you’re using it to transfer balances to, make sure there is not a penalty for using the card to make purchases. Many 0% credit cards begin to charge interest-sometimes double or triple the normal rate-if you make new charges to the card! If you are getting the card for everyday use be sure that you know the penalty for late or missed payments. Again, you could trigger some very large interest rates if you fail to make a payment on time.
0% credit cards use what are commonly called “teaser rates”, a low or no interest rate to entice you into getting the card. The credit card companies don’t necessarily want you to get into debt, but merely to spend money since they make their money not only from interest charged but from processing transactions. Merchants pay fees for the ability to accept credit cards and those fees are the bread and butter of the credit card industry.
You may find out there is a time limit on your no interest credit card. Typically, companies will keep the interest rate at zero for six, twelve or eighteen months but once the target month comes the rates rise to “normal” rates. It’s up to you to keep track of when to stop using your card in order to avoid interest charges; the credit card companies certainly won’t remind you!
0% credit cards generally require an applicant to have a good credit score. Your score tells them how you handle money and if you’d be a good risk. If you pay your bills on time consistently, have a low debt to income ratio, don’t have many open accounts and don’t often apply for credit you will most likely have a decent credit score.
You can find a 0% card on the internet or you may get an offer in the mail. Choose carefully, remembering that applying for a card will affect your credit score. Be sure you know all the terms, conditions and fees associated with the card you choose before you apply for it.
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Comparison of Top 10 Credit Card Offers
| Credit Card | Card Details | Interest Rate | Cash Advance Rate | Balance Transfer Rate | Annual fee | Interest free days | ||
|---|---|---|---|---|---|---|---|---|
 Halifax All in One Credit Card |
The Halifax All in One credit card offers a great introductory rate, and is perfect for saving you money now as well as in the future. | 15.9% APR | 27.95% p.a. (variable) | 0% for 9 months | No Annual Fee | 59 Days interest free |
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 Virgin Credit Card |
As well as a great rate, the Virgin Credit Card comes with:
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16.6% APR (variable) | 27.9% p.a. (variable) | 0% for 16 Months (2.98% fee on balance transfers) | No Annual Fee | 50 days on card purchases |
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 Capital One Classic Visa |
This card is designed for people with bad credit ratings, this is why the rate is quite high. |
Typical 34.9% APR variable | 34.9% APR | 34.9% APR | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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As well as earning Flying Club miles which you can spend on brilliant rewards like flights, upgrades, car hire and more, a Virgin Atlantic Credit Card gives you up to 46 days interest free on card purchases. |
17.9% APR typical rate | 20.9% p.a. (variable) | 0% for 6 months (2% handling fee) | No Annual Fee | Up to 46 days on card purchases only. |
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The Virgin Prepaid MasterCard from Virgin Money is a prepaid Mastercard that you can add funds to, and use these funds for normal purchases. |
N/A | N/A | N/A | N/A | N/A |
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5% cashback on purchases in your first three months (up to £4,000 of spend). Thereafter, earn 0.5% on the first £3,500, 1% on £3,501 to £10,000, and 1.5% after £10,001. |
18.9% p.a. | 27.9% p.a. | 18.9% p.a | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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Vanquis Visa Card is designed for people with no credit history or who have previously had bad debt. Representative 39.9% APR (variable) |
Representative 39.9% APR (variable) | 39.9% | N/A | No Annual Fee | Up to 56 days on card purchases only |
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The award winning prepaid card with no credit check or bank account needed. | Funds in your Account will not earn interest | Prepaid only - N/A | Prepaid only - N/A | £59.40 p.a. (£4.95/month) | Prepaid only - N/A |
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