In the UK, credit cards are a need for daily living. Data indicates that in 2020, credit cards made up 35% of all payment cards issued in the UK. We'll examine the top 0% financing credit cards available in the UK in this article.
How a Credit Card Works
A credit card is a financial item provided by banks that enables credit-based spending. The best way to conceive of a credit card is as a loan that you receive from a bank. The money can then be used for your regular business activities. You can rent a car, pay for your accommodation, buy things, and buy a television online. A debit card withdraws funds from your checking account, unlike a credit card, which does not. In contrast, a credit card uses the money of the issuer and then bills you later. A credit card typically sends your activity to a credit bureau, whereas a debit card does not. This is another distinction between the two.
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Types of Credit Cards
Different credit card types have been developed by banks and other issuers. Different demographic groups are targeted by these cards. For instance, a travel card is intended for corporate leaders who are always on the go. The additional credit card kinds include:
- Because they just offer credit, standard credit cards are frequently referred to as "plain vanilla" cards.
- Credit cards with rewards - These cards offer rewards to its holders for each purchase.
- Credit cards for students - As their name implies, these cards are made for students. They have characteristics that appeal to this group.
- Charge cards - A charge card is a credit card without an established spending cap. At the end of each month, the balance is always due.
- Credit cards with collateral are referred to as secured credit cards. Most of the time, those with bad credit histories employ them.
Subprime credit cards, restricted purpose cards, business credit cards, and balance transfer credit cards are other popular credit card categories.
What are 0% Finance Credit Cards?
The interest you pay helps banks who issue credit cards to make money. A credit card with 0% financing will not charge you interest for a specified number of months. You won't be assessed any interest before the time ends as a result. You won't have to pay interest if, for instance, you use the card to purchase a television. When the time of 0% interest expires, you will then begin paying standard interest.
Top 5 0% Finance Credit Cards in the UK
Credit cards with 0 financing are available from many UK institutions. The top cards you can use are listed below:
For up to 27 months, this credit card offers 0% interest on purchases. Additionally, balance transfers are eligible for a 27-month period of 0% interest. The card assesses a variable 21.9 percent APR after the grace period has ended. There is no yearly charge.
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For a period of 27 months, this credit card provides a 0% interest rate on both purchases and debt transfers. A 3 percent balance transfer fee applies. There is no yearly cost. The interest rates you will pay after the 27 months are illustrated in the example below.
For 20 months, there will be no interest charged on transactions made with this Marks & Spencer credit card. Additionally, a balance transfer for 20 months is available at 0% interest. The transfer cost is 2.9 percent with a minimum of 5 pounds, in contrast to the Sainsbury's card.
For 18 months starting with account opening, this HSBC credit card has a 0% interest rate. Additionally, it provides a 0% rate on balance transfers completed within the first 60 days. A 2.9 percent transfer fee is charged. There is no yearly charge for the credit card.
For the first 12 months following account opening, the Santander Zero Credit Card charges no interest. When paying in local currency, there are no foreign transaction costs, and there are no cash withdrawal fees everywhere. You must make more than 7,500 pounds a year to be eligible to apply.
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What is a Balance Transfer?
You might be wondering what a balance transfer is after reading what we said about it above. You can transfer all or part of the balance from another credit card to your card with 0% interest using a balance transfer function. People use this transfer because it allows them to switch to a card that doesn't charge fees, which saves them money. The banks that are permitted to make this transfer are restricted by some banks.
Eligibility for a 0% Finance Credit Card
Banks set requirements for who can apply and be approved for their 0% financing credit cards. The following are some typical requirements for this:
- Age — To apply and be eligible, one must be older than 18 years old.
- You must have resided in the UK for the previous three years.
- Your bank account information should be given to the bank.
- Employment - Most banks require that you have a job in order to qualify. You shouldn't be a student either.
- Individual Voluntary Agreements (IVAs), court judgments, and court cases — You shouldn't have filed for bankruptcy.
- Credit history - To make sure you can pay the debt, the bank will look up your credit history and score.
How to Apply for a 0% Finance Credit Card
Applying for a credit card with no finance charges is a simple process. You can apply for a card through the majority of UK banks by calling, emailing, or going in person. To apply for the card, you can also do it via the bank's website. Before you do, we advise you to compare the services provided by the majority of banks using websites like Money Supermarket.
Pros of 0% Finance Credit Cards
Credit cards with 0% interest have a lot of benefits. Among the most prevalent advantages are:
- No interest fees - With these cards, you can borrow money for nothing and not be charged fees.
- Spread out expenditures - If you're preparing to make a large purchase, a credit card with 0% interest is perfect.
- Pay off debt - All cards offer a free balance transfer, as you can see above. This function allows you to pay off debt more quickly.
Cons of 0% Finance Credit Cards
While all 0% financing credit cards are beneficial, there are a few drawbacks as well. Among these drawbacks are:
- High interest rates - After your set-free months have ended, these cards carry a higher rate.
- Penalty for late payments - If you skip or delay a payment, the bank may revoke the free period.
- Consumption - Since you don't pay interest on the card, you might raise your consumption.
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Conclusion on the Best 0% Finance Credit Cards in the UK
You can borrow money interest-free for a predetermined length of time with a credit card with 0 finance. Although the card is wonderful, we advise you to remember to make your payments on time. By raising your credit score, you'll be able to cut your interest rates.