How do 0% credit cards work?

What is a 0% credit card?

A 0% credit card is a credit card with an introductory or promotional interest rate of 0%. This is available for a set period when you take out the card. While the promotion or offer is in place, you can make purchases or repay balance transfers without interest being charged.

Key features of a 0% credit card are:
 

• You won’t have to pay interest during the promotional period
• You will need to make the minimum monthly repayment on time
• Stay within your credit limit, otherwise the 0% terms could be revoked

After the offer ends, you’ll be subject to the standard interest rate on the remaining balance of your card. Moving forward, you'll need to pay interest on any new purchases unless you've qualified for additional promotional rates. Alternatively, you can avoid interest charges by paying your entire balance by the statement's due date each month.

What kinds of 0% credit cards are there?

There are three main types of 0% credit cards available. These include:

• 0% interest on balance transfers – These credit cards offer an introductory 0% interest period on any balances transferred from another credit card.
• 0% interest on purchases – Typically, they offer an introductory 0% period on any purchases made on the credit card within the introductory period.
• 0% interest on purchases and balance transfers – these cards have an introductory 0% period on any purchases or balances transferred from another credit within the introductory period.

How to choose the right 0% credit card for you

There are a several things you should consider before applying for a 0% credit card. To choose one that suits your lifestyle and financial situation, think about:

• Length of 0% interest period – different cards have their own introductory 0% interest periods. Check how long the 0% period will last.
• Budget – consider how much you can afford to borrow. Think about whether you’ll be able to afford repayments within the 0% period and interest payments once that introductory period ends.
• The APR (annual percentage rate) – this tells you the full cost of borrowing on the card, if you don’t pay the full balance off each month. It’s important to factor this into your budgeting. 
• Spending and usage – what you plan to use the card for could affect the type of card you choose. Another type of credit card may be more suitable, depending on what you’re planning to spend when you use it.
• Fees – many 0% Balance Transfer cards charge a fee – usually a proportion of the amount you transfer – which is added to your balance and, if you haven’t repaid, also incur interest after the promotional period ends.
• Any exemptions or additional charges – look to see if there are any exemptions to the 0% period for the card you’re considering. It’s also important to check if any extra charges, like annual fees, may apply.
• Rewards – check whether the 0% credit card comes with any rewards that may suit your lifestyle. 

0% introductory offers with Sainsbury’s Bank credit cards

At Sainsbury’s Bank we offer a 20 Month Balance Transfer Credit Card with 0% interest on balance transfers for 20 months (3% fee applies).