About Purchase Credit Cards
What is a purchase credit card?
A purchase credit card is a card that offers a special rate on all spending. They often offer zero per cent introductory rates, with some offering up to 18 months before any interest is charged, enabling you to spend and to spread the payments over a period of time. Spending on a purchase credit is a way to borrow money for free – you can use your card to pay for an item, the credit card company fulfils the payment allowing you to pay back the credit card company at a later date.
Are there are any drawbacks to a purchase card?
Whilst a purchase card is a great way to spread repayments over several months, the zero per cent offers can be withdrawn if you don’t keep up on minimum payments (typically 3% of the balance plus any fees), making the cost of borrowing rise substantially. Often, as part of your application you’ll be given the opportunity to set up a direct debit to pay the minimum each month, ensuring you meet the criteria to keep the offer.
It’s also worth considering how long it will take you to pay the balance, for example if you purchase an item worth £2,500 and pay the minimum each month it will take you longer than any introductory period to clear the balance. After the initial period the rate will increase and you’ll start to be charged interest on the balance, it’s then at this point you could complete a balance transfer and move the balance to a new credit card, or alternatively set up a direct debit to a fixed amount each month to ensure that the balance is cleared before the end of the promotional period.
Can anyone get a purchase credit card?
Purchase cards are typically aimed at those with good credit rating. If you are struggling with payments and are considering a credit card then a purchase credit card may not be the card for you. You can use our free Card Matcher tool to check the likelihood of being accepted for a card before you apply.
You can also check your credit rating for free to find out what you can do to make sure you get the credit you want.
Which providers offer purchase cards?
Many credit card providers offer cards with zero per cent introductory rates on purchases, but typically the longest introductory periods are provided by Barclaycard, Nationwide, Bank of Scotland and Halifax.