Compare our best interest free credit card deals

If you’re looking for a way to spread the cost of a large purchase then you should consider a 0% purchase card, or a 0% money transfer card. These offer long interest free periods so you can split the cost into monthly instalments without paying any interest. But you have to make sure to pay at least the minimum payment every month, and ideally pay off the whole balance before the 0% interest period ends, otherwise you'll be charged interest on the remaining balance.

If you’re looking for a way to pay off credit card debt and save money, you should consider a 0% balance transfer credit card. These let you move your debt from your current card(s) to a new card and pay it off interest free for a set period. The 0% period can range from just a few months, and go all the way up to 30 months or more, though for the longer interest free periods you’ll probably have to pay a small balance transfer fee.

Most people may think that the only way to borrow cash is through a loan. But with a 0% money transfer card, you can borrow money and have it transferred to your bank account. The 0% period allows you to pay off the amount you’ve borrowed without being charged interest.

APR stands for "Annual Percentage Rate" and is the total cost of borrowing over 12 months. For example, if your APR is 20%, you will be charged 20p for every £1 borrowed over the course of 12 months. If you pay your balance in full and on time, you will not pay interest.

Your credit limit is how much you are allowed to borrow on your credit card at any one time. If you exceed this amount you can be charged a fee - typically £12 - and it can leave a mark on your credit report.

You are generally not told what your credit limit will be until the end of an application process - although you can ask your provider for a higher one at any time.

Credit limits are awarded based on your credit history and your earnings.

Once you've reached your credit limit you need to make a payment to bring down your balance before you can use the card again. Find out more in your guide on credit limits.

Your credit report is your history of borrowing and paying bills over the past few years. Lenders are required to send this information to three agencies, who compile reports on UK residents.

Before making a decision to lend money to someone, lenders check your report from one of the three credit reference agencies. You can request a copy of your credit report to ensure that there are no mistakes on your file, request changes if you see one and add notes explaining any missed payments.

Your credit score is calculated based on your credit history. Each credit reference agency has its own method of calculating this.

You get points for things like making payments on time and lose them for things like being late or defaulting on a loan. Typically, the higher your score, the more likely you are to be offered a lower rate of interest or higher credit limit.

There is no absolute pass or fail mark attached to a credit score, with each lender making its own decision on what it considers acceptable.

If you miss a few payments, generally between three and six, your credit card provider will send you a default notice, giving you at least 14 days to pay the amount stated on the notice. Court action could be used to recover the debt and if you fail to make the payment your account will be ‘defaulted’, meaning you won’t be able to use your credit card any more. It is possible that your provider may have already blocked spending on your account after the first couple of payments missed. A record of the default will also stay on your credit report for six years, making it harder to get any form of credit throughout this time.

If you’ve made an application for credit, such as a credit card, loan or mortgage, lenders will do an in-depth check of your credit report, which is known as a hard credit check.

It's a detailed look into your financial history, especially your borrowing history, so a lender can see your track record of repaying money you've previously borrowed.

A hard check will show any negative marks on your credit report, like overdue payments, missed payments, previous applications for credit and even bankruptcies.

Every time a hard check is carried out, it leaves a mark on your credit report, which can hurt your credit score.

Interest free credit cards allow you to either transfer a balance, make purchases or transfer cash to a current account without paying any interest on this for a set period.

After this set period you will be charged on any debt remaining on the card at your standard APR. There is also generally a fee attached to money transfers and balance transfers.

While in the interest-free period you'll still have to continue making regularly monthly payments as usual.

Credit card introductory offers can take the form of bonus reward points, extra cashback, 0% on balance transfers or 0% on purchases.

Introductory offers are used to attract new customers, but they run out and revert to the standard offer or rate.

Once the introductory rate has ended, check out whether you are still getting the best deal or whether you need to switch to a different credit card.

Every credit card has a minimum monthly repayment amount set out in its rules, which you can find in the summary box before applying.

This is calculated by working out what interest you've built up over the past month, then adding a small percentage of your total balance to this. If you have a small overall balance there might be a fixed sum instead - for example £5.

Paying more than the minimum monthly repayment will see your card cleared sooner and you charged less interest overall in almost all cases.

A soft credit check is a top-level view of your financial history so lenders can asses you for any offers, or show you what you could potentially be eligible for.

Although a a soft credit check is recorded, it doesn’t leave a mark on your credit file. This means that while you can see them when you look at your own report, lenders can't. That means a soft credit check won’t impact your credit score, but, you’ll be able to see if anyone has checked your credit history.

In certain industries, some employers will perform a soft credit check if you’ve recently applied for a job with them.

If you take out a balance transfer or money transfer credit card and wish to transfer money to it, you are often charged a transfer fee. This is usually 1-3% of the total amount you transfer for a balance and about 4% for a money transfer. Some credit cards will refund you a portion of the fee if you make all of your payments on time.

The annual percentage rate (APR) is the interest rate at which you will borrow money on you credit card. It's typically stated as a yearly interest rate and includes any fees and costs associated with the card. In most cases you can avoid paying interest by paying off your credit card balance in full by the due date of every billing cycle.

The interest free period depends on the type of card it is, and the 0% period you've been approved for. For balance transfers, it can go up to 30 months or more on the best deals. For purchases, the longest 0% period could be up to 22 months or more. And for money transfers it could go up to 18 months. H

However, the longest interest free periods are typically offered to those with good credit score and higher incomes.

Missing a repayment could mean losing your 0% offer. You'll also be charged a late payment fee and it'll likely leave a mark on your credit report.

It's a good idea to setup a direct debt for at least the minimum monthly repayment to avoid such a scenario.

After the 0% period ends, your card's APR will come into effect, known as the revert rate. So anytime you use the card you'll be charged interest on your spending, unless you pay off the full balance at the end of each monthly billing cycle.