A few years ago it would have been unthinkable for any company to offer a credit card with an interest rate of 0%. When new American companies such as Capital One entered the UK market offering “low balance transfer” rates of 10% APR the UK credit card market was revolutionised for ever. This increased competition led to a huge price war between credit card companies and balance transfer rates eventually reached the magic 0% figure.
At first 0% interest credit cards were few and far between with companies only offering these rates for short periods of time, however, the combination of fierce competition and low national interest rates meant that to compete for your business, more and more companies offered 0% credit cards for longer and longer periods of time. Now nearly all major credit card providers offer a 0% credit card in one form or another with periods ranging from 5 months to 9 months and sometimes even longer.
One thing to consider when applying for a 0% credit card is to make sure the 0% offer is relevant to what you want to use the card for. For example very few credit cards offer a 0% interest rate that applies to cash advances (these are normally charged at a higher rate than the standard APR). If you intend to use the card to fund an expensive purchase so you can speed or delay paying for goods you need a card that offers 0% on purchases rather than balance transfers - see our guide to best purchases credit cards.
If you have a balance on other credit cards then applying for a 0% credit card could save you hundreds of pounds a year but make sure that the 0% interest rate applies on balance transfers and not just purchases. Also remember that after the introductory period the rate charged by these companies often goes much higher so to keep saving, keep switching! Read our guide to the best balance transfer credit cards for the best deals for rate surfers!
Also if you never borrow money on your card and pay off your balance - in full - each month then having a 0% credit card will be no use. You would be better off getting a card that offers cashback or other reward to get something in return for your spending as you already get charged “0″ interest! Read our guide to reward credit cards.
