Spend on your credit card with no interest!

In a bid to attract new customers credit card providers sometimes offer low interest introductory rates on purchases. Offers of interest free credit on purchases made with the card can be anything between three months and a year. Choosing a card which offers 0% interest on purchases for a set period gives you the option to spread payment for items over a decent period of time and can also avoid the high interest rates charged by some credit and store cards.

Before you do sign up to a card with a 0% introductory offer on purchases, you should check how long the interest rate applies for and also what the interest payments will increase to after the low interest period (i.e. the standard APR of the provider).

After the 0% interest on purchases expires, if you have a balance remaining on your card, it may be worth looking at switching to a balance transfer card, which usually offer a 0% interest introductory rate on existing balances transferred from other cards and can provide you with the opportunity to clear what you owe. Almost all of these, however, come with a balance transfer fee as a percentage – usually 2.5% to 3% these days.

Here are some of the best 0% on purchases deals currently around.

The Barclaycard Platinum Purchase Credit Card gives you 0% on purchases for ten months and 5.9% on balance transfer for the life of the balance with no handling fee. Barclaycard has no annual fee, and offers confidential advice if you become an identity theft victim with their Identity Protection Service, safer shopping with Fraud Protection – including chip and PIN, and checking for unusual spending on your account. Barclaycard also offers Purchase Delivery Protection – protecting your online, phone or mail orders against loss or damage, from despatch to door (this excludes second-hand goods and services). When you are abroad Barclaycard offers emergency help, and great holiday deals with their Travel Service. You can manage your account online, and opt for text alerts five days before payment is due. To get the Barclaycard Platinum Purchase Credit Card you will need a good credit record, and have a regular income of more than £10,000 pa. You will also need to be over 21 and not to have missed multiple payments on a credit agreement within the last 12 months, and have no CCJ, IVA or been registered bankrupt. The card is not available to existing Barclaycard customers.

The MBNA Platinum Rewards Card offers 0% on purchases for nine months and 0% on balance transfers for nine months with a 3% handling fee. There is no annual fee on the card. The rewards you get with this card are points earned when you shop and you can redeem them against flights, shopping vouchers and cash. You can redeem your points against a wide choice of flights, hotels, package holidays, city breaks and car hire. You can pay partly with points and partly with cash. You can buy a range of items from DVD players and televisions to family treats. Your points can be used in exchange for vouchers from high street shops including Selfridges, John Lewis, Boots, Halfords, WHSmith, Debenhams, and others or you can choose wines from around the world. If you prefer straight cash, you can exchange your points for this too. It is easy to earn your points - using your card for your everyday card purchases such as food, petrol and going out, earns 1 point for every £1 spent. In addition you receive 2,000 bonus points within 90 days from the date your account is opened. Typical APR is 15.9%.

HSBC’s credit card offer gives you 0% on purchases for 12 months from account opening and 4.9% on balance transfers until 31 January 2012 (made within 30 days of account opening). This would be ideal if you were looking to transfer balances from your existing non–HSBC Bank credit cards and store cards. Conditions and a 2.5% balance transfer fee apply (minimum £5). Typical APR is 15.9% after the initial period.

The Barclaycard Charity Card gives you 0% on purchases for six months and 0% on balance transfers for six months with a 2.5% handling fee. Barclaycard will make a one-off donation of £5 when you make your first transaction on your Charity Card then a further 0.3% of the amount you spend. These donations are divided equally between Marie Curie Cancer Care, Save the Children, Samaritans and the Woodland Trust. They do not pay 0.3% on cash advances, balance transfers and any other purchases later refunded. Typical APR is 14.9%.

Of all the cards discussed here the MBNA Platinum Rewards Card seems to offer the widest range of benefits, with 0% on purchases for nine months, 0% on balance transfers for nine months, and a whole range of rewards.

If you simply want to have no interest on purchases for as long as possible then the HSBC Credit Card is your best option as it gives you the longest period – 12 months – but you should avoid using it for transferring your balance as it will cost you more than you need to pay.