Money Outlet

As well as 0% balance transfers many credit cards also offer introductory interest free rates for new purchases. This 0% purchase rate is generally for a limited period only ranging anywhere between 3 to12 months, after which the standard APR then applies to the remaining balance.

Although the 0% balance transfer period has gradually extended over the years on most credit cards, it is however rare to find a card where the 0% on new purchases deal runs alongside for the same period of time. Some cards do now offer an interest-free introductory rate allowing both balance transfer from another credit card and new purchases, where both interest-free deals run for the same number of months, some for up to 12 months. However the overall majority of credit cards still have a shorter term on their 0% new purchase deals.

Credit cards offering both 0% interest rate deals are a great choice if you wish to make purchases on your new card in addition to simply transferring the balance from an old one. Providing you can pay off the lump sum within the 0% purchase period you won’t inadvertently pay more interest on your balance. However most credit card issuers will offset any payments you make against the low interest rate you are charged first i.e. any balance transfer. The technical term for this is called ‘negative payment hierarchy’ so do watch out for credit cards that have a shorter 0% period for new purchases. The best way to avoid being charged a higher rate of interest at say 15% to 20% APR, is to look for a card which offers streamlined interest-free deals or, avoid making further purchases on a card with a shorter 0% purchase period.