0% Purchase Credit Cards

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.

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.

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.

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.

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.