0% Purchase Credit Cards

Some lenders offer a 0% purchase rate on credit cards, and while this may be an appealing feature, there are other costs to consider. We’ll guide you on the ins and outs of 0% purchase credit cards so you can consider if this a suitable option for you.

*iSelect (through its wholly owned subsidiary, Tyrian Pty Ltd) and Fair Comparison Pty Ltd (which operates this credit product comparison) may receive a commission if users click through, apply, or successfully qualify, for a loan or credit card product from or through a provider.

Learn More

  • Default
  • Longest Purchase Period
  • Lowest Cash Advance Rate
  • Longest Balance Transfer Period

Fair Comparison compares loan products from a range of banks and other financial or credit product providers and does not compare all products in the market or all product features. To filter the results, you will need to enter some basic information which will generate a comparison of products that fall within those parameters. The default ordering of products is based on initial purchase rate. Fair Comparison do not take into account your objectives, financial situation or needs, or provide advice, assistance or recommendations.

Learn More

More Details

First of all, what’s a credit card purchase rate?

A credit card’s purchase rate is the amount of interest you would accrue on anything you buy with the card if you haven’t yet paid off the outstanding balance for the current statement period.

This rate is known to contribute to credit card debt, so if you’re a frequent shopper, then a high purchase rate on a credit card might be something you’d prefer to avoid when comparing options.

It’s a rate that varies from provider to provider, and it could be worth looking out for when you compare options.

Now what’s a 0% purchase credit card?

With these credit cards, lenders offer shoppers 0% interest on all new purchases for a limited time period, which can last for a few months or more.

These 0% purchase time periods are generally designed to encourage shoppers to quickly sign up and take advantage of having no interest on new purchases.

What could I use a 0% purchase credit card for?

Well, your couch might have well-worn cushions that sink to the springs underneath when you sit on it (ugh!). And although you might be well overdue for a new couch, you might not want to pay for the whole thing upfront. This is where a 0% purchase card could be a suitable option for you.

You might even be thinking that it’s about time for an interstate Australian holiday while international borders are still closed, or you could simply be ready for some home or backyard renovations.

Whatever your current lifestyle, a 0% purchase credit card could come in very handy for some little lifestyle upgrades or experiences.

If there’s a 0% purchase rate, what other fees are there to consider?

The table below shows the types of fees you should consider when comparing 0% purchase credit cards:

Annual fee- Some lenders charge an annual fee for using their card.
Cash advance rate- This is the rate you’d be charged on any cash you withdraw from an ATM or retail checkout.
Balance transfer rate- This is the rate you’re charged if you transfer an existing balance of funds to a balance transfer credit card.
Foreign exchange fee- If you’re shopping online or buy something overseas, you might incur this fee on top of the exchange rate.
Foreign purchase fees- There might also be extra fees to cover international processing costs.
Late payment fee- If you miss a repayment, you might find yourself paying a late fee.
Payment dishonour fee- If you try to make a repayment and fail due to lack of funds, you could also be charged for this.
Administrative fees- There could also be monthly account fees to keep your card in use.
Paper statement fee- Since most consumer communications have now shifted to email, some lenders may charge you if you choose to receive a printed balance statement by mail.
Payment handling fee- Transaction fees could be either in person or online and vary between lenders.
Additional cards- You might have to pay an extra fee if you request an additional card.
Limits on rewards points- If there’s a rewards program, check to see if there’s a monthly limit. If there is, it’s possible that as you keep spending, you might not get as much back from your rewards program (compared with a credit card that offers limitless rewards points).

What are the pros and cons of a 0% purchase credit card?

Generally, some good things are:

  • Diligent savers can be rewarded: If you’re good at staying on top of your finances and aren’t easily lured into frivolous spending, then you might appreciate the savings you could keep from interest-free introductory periods on new purchases.
  • Big expenses don’t need to be fully-paid immediately: These cards might also work well for you if you’re in dire need of new furniture, renovations, (and yes, even that little getaway), as you can take advantage of the 0% purchase rate period.
  • Pay off debts quicker: Since you won’t accrue interest on the purchase rate during the given time period, you’ll have the opportunity to clear your debt quicker.
    And some of the cons are listed below:
  • If you’re late or miss a repayment fee: Make sure you’re clearing your monthly repayments on time to avoid any penalties.
  • If you withdraw cash: Otherwise known as a cash advance, if you do this you’re likely to be charged interest against the amount of cash you withdraw at that time.
  • If you’ve got an outstanding balance at the end of the 0% purchase rate period: Since the 0% interest purchase rate is usually available for only a few months, make sure you don’t have an outstanding balance on your card once it ends. If you do, then any outstanding balance you have left on the card is likely to accrue interest against the standard purchase rate.

So while a 0% purchase credit card might sound like an appealing option to you, there are other fees you should consider while you compare options. You might also like to check out the Australian Government’s Moneysmart guidelines about choosing a credit card.

Ready to go?

If you’re ready to compare 0% purchase credit cards, you can start here online with iSelect. See the range of providers and simply click on an option that suits you to begin your application.

Credit Card Providers

You can use our comparison tools to compare from our range of providers and their products.*