Ireland’s best 0% purchase credit cards

What is a 0% purchase credit card?

It’s a type of credit card that allows you to buy goods and services without paying any interest for a set period.

Once the introductory interest-free credit period ends, you will start to pay the standard variable interest rate that your card provider sets.

How does a 0% purchase credit card save money?

The biggest potential saving is in the amount of interest you’ll pay.

If you choose a card with a 0% introductory rate, you can make purchases without being charged interest, which can be a useful way to spread costs without paying extra.

You will still need to make your credit card provider’s minimum payment each month and should stay within your credit limit to avoid other charges.

You will also need to have a plan for how to pay off your credit card balance once your 0% period ends.

What happens when the introductory rate ends?

When your introductory period ends, you will start to pay interest on your purchases and outstanding balance.

If you’re near the end of your introductory period and haven’t paid off your balance, here’s what you can do to avoid paying the higher rate of interest;

1. Pay off the remaining balance in full
2. Increase the monthly repayment to the most you can afford
3. Transfer the balance to a balance transfer card with a 0% offer

How to choose the best 0% purchase card

Before you compare credit cards, it is worth thinking about what you want to use the card for, e.g. one major purchase or lots of small things and for how long you need credit, e.g. several months or over a year or two.

When you are comparing purchase credit cards, consider these factors:

• Introductory % rate
• Length of the introductory rate
• The standard APR (Annual Percentage Rate)
• Stamp Duty
• Annual fees

If you are still unsure which card is best for you, choose the one that gives you the longest period to repay what you borrowed. Our Complete Guide to Credit Cards can also give you tips on borrowing wisely.

Is a 0% rate always the best choice?

Although it is tempting to choose a 0% offer, a low interest rate over 12 months may work out cheaper than a 0% rate over 3 months if you want to spread your purchase spending over a longer period of time.

This is because once your introductory offer ends, the interest rate will revert to the standard variable interest rate, which will be much higher.

Other pros and cons include:

Pros

• 0% interest can save you money if you repay on time
• You can transfer high-interest debt from another credit card
• Good for spreading the cost of larger purchases

Cons

• The 0% rate can revert to a much higher rate
• You still have to pay a balance transfer fee
• You can face a late payment fee if you don’t pay on time

What are the alternatives to 0% purchase cards?

Some credit cards offer a discounted interest rate for an introductory period rather than 0%. These introductory rates can sometimes last longer than the best 0% deals.

Low-interest cards can be a cost-effective option if you need longer to pay back what you have borrowed.

Here’s an example:

Paying for your €1,000 holiday with a ‘0% for 3 months’ will attract no interest for the first 3 months; however, taking 12 months to clear the debt will cost about €45 extra in interest (18% APR). Alternatively, paying with a 4% purchase card over 12 months would mean you pay just €20 in interest.

Another option is choosing a card with an Instalment Plan Option, which allows you to repay a fixed monthly amount at a low interest rate on purchases over €250.

Is a 0% purchase card cheaper than a loan?

It depends on whether you repay your credit card balance in full each month and how much you have borrowed.

If you’re looking to borrow a smaller amount, a credit card could be the cheaper option. That’s because interest rates on personal loans can be higher on smaller sums.

If you need to borrow a much larger amount of money, then a personal loan could work out better, as your credit card limit might not stretch that far.

What about an overdraft?

Similarly, it depends on how you use your credit card and the overdraft arrangements you have with your bank.

You choice also depends on:

• How much you want to borrow: You can typically get a higher borrowing limit on a credit card.
• How you want to spend it: Overdrafts are more suitable for cash purchases or cash withdrawals.
• How quickly you need it: If you have a current account, accessing an overdraft is usually a quicker way to borrow.

How do I calculate monthly interest on my credit card?

Once you come to the end of the introductory offer, you will have to pay interest on your outstanding balance.

The yearly APR is calculated by your credit card provider. You can determine the monthly cost of your credit card by dividing the card’s APR by 12, then multiplying that by your current balance.

For example, if your credit card’s APR is 18%, you can divide it by 12 to get 1.5%. Then, multiply 1.5% by the balance. If your balance is €1,000 for example, you would owe around €15 in interest.