Pay no credit card interest on spends for 27 months: Post Office launches market-leading 0% deal on purchases

 

By EMMA GUNN FOR THISISMONEY.CO.UK

Updated:

Post Office has launched a new Matched Credit Card giving spenders a market-leading 27-months of interest-free purchases.

The new offering outstrips the previous best-buy deals from Clydesdale and Yorkshire Banks by offering one-month longer to clear expensive spending without clocking up interest. 

The deal also includes 16 months 0 per cent interest on balance transfers but comes with a one-off 2.98 per cent handling fee that would cost a borrower moving a £1,000 balance £29.80.

Plastic fantastic: Pay no interest on yuor shopping with the new Post Office Matched credit card

Plastic fantastic: Pay no interest on yuor shopping with the new Post Office Matched credit card

Credit cards offering lengthy interest-free promotions on spending can be a useful tool for those looking to spread the cost of a big-ticket item. They can also help to clear a card balance quicker without your debts being further inflated.

But they are only worth considering if you are confident you will be able to repay what you owe before the standard APR kicks in or if that APR remains competitive.

John Willcock, head of credit cards at Post Office Money, says: ‘We are dedicated to providing our customers with the best deal currently available. New Post Office Money cardholders can take advantage of zero per cent on purchases for 27 months, providing them with the flexibility and convenience they require, especially in the run-up to Christmas.’

What it offers...

The main draw of the Matched Credit Card is the 27 months of interest-free purchases, after this it reverts to the standard rate of 18.9 per cent.

To activate the introductory offer a transaction must be made on the card within three months of opening the account, otherwise the promotional period shrinks to just 16 months.

HOW IT STACKS UP  

Clydesdale and Yorkshire Banks both give 26 months interest-free spending on their Gold Mastercard credit cards, after this a rate of 18.9 per cent applies.

The offer also includes 12 months 0 per cent on balance transfers, charging a one-off handling fee of 3 per cent.

Halifax follows close behind with its All In One card allowing 24 months free from interest on both balance transfers and purchases.

The bank adds a 0.8 per cent handling charge when shifting debt to the card, standard interest is set at 18.9 per cent.

Both Santander and Tesco Bank offer reward incentives on top of decent 0 per cent purchase offers.

Santander's 123 Credit Card gives 23 months interest-free on balance transfers, with no fee for moving debt from an existing card. Plus it pays up to 3 per cent cashback on your spending.

After the introductory period ends watch out as the APR jumps to 16.5 per cent. Santander does charge an annual fee of £36.

Purchases with the Tesco Bank Clubcard Credit Card remain interest-free for 21 months, meaning you have well over a year to pay back what you spend before the 18.9 per cent APR kicks in.

You get one Clubcard point for every £4 you spend on the card (in-store or elsewhere). One point is worth 1p if spent in-store at Tesco and 4p if redeemed using Tesco's Clubcard rewards vouchers.

Shoppers will also need to repay on time each month and stay within their credit limit to keep any promotional rates.

The deal also includes 16 months of 0 per cent on balance transfers for a 2.98 per cent fee. Again, transfers must be made within the first three months of opening the account to qualify.

Borrowers will need to clear any balances before the end of the introductory period to avoid hefty interest.

There is no annual fee attached to the offering and travel money bought on the card at the Post Office carries no cash withdrawal fee.

Overseas use incurs a 2.99 per cent transaction fee, while using your credit card to withdraw cash from an ATM costs 2.5 per cent (minimum of £3).

Remember not everyone will be accepted and even those who are, may be offered a higher interest rate or shorter promotional offer.

This is because banks only have to offer headline rates and advertised deals to 51 per cent of successful applicants.

Prefer to ditch the teaser rates?

If you would prefer a no-frills option a low-rate credit card could be a better fit.

These cards will charge consistently low rates and help avoid teaser-rate traps.

Those available from Lloyds Bank, Halifax and Bank of Scotland are good options for borrowers looking for the cheapest possible long-term low rate. 

All three offer the market-leading rate of 6.45 per cent. The banks apply a 3 per cent handling fee for balance transfers. 

Representative example: If you spend £200 at a purchase interest rate of 18.9% p.a. (variable) your representative rate will be 18.9% APR (variable). Credit limits and terms may vary based on your individual circumstances. Balance transfer offers and introductory fees limited to transfer made with 60/90 days of account opening. See product specific T&Cs. * must spend £1k within 3 months

 

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