What happens when your interest-free period ends?

A 0% credit card allows you to pay off your debts or spread the cost of purchases – or occasionally both – interest free. But the interest-free period doesn’t last forever. Once it’s over, you start paying the card’s standard interest rate.  

When happens when your interest-free period ends?

With an interest-free credit card, you can borrow at a 0% rate of interest, but only for the term of the introductory deal. 

At the time of writing, this could last anywhere from six months to the 29 months offered by the top 0% credit card.

Once the introductory period expires, you have to pay interest on any remaining debts at the standard APR on the card.

And as standard credit card APRs are usually at least 20%, that could prove expensive – especially if you can’t clear the debt quickly.

You can find out how much you might have to pay with our handy credit card interest calculator.

Read more…

• 0% purchase credit cards

• Bad credit credit cards

• Instant-decision credit cards

• Major credit cards

Will your interest rate change after an introductory period?

Yes. The 0% rate is only available during the introductory offer period. After that, you start paying the card’s standard APR.

Your interest rate may also change during the introductory period if you fail to follow the rules.

For example, if you miss a monthly payment date, your card provider may revoke your introductory 0% offer with immediate effect.

That’s why it’s a good idea to set up a Direct Debit to pay off at least the minimum amount required each month while making sure you pay off more than that when you can.!

Most card companies only give you a certain time to transfer balances from elsewhere at the 0% rate, so you may also end up paying a higher rate if you miss this deadline.

Unless you take out a credit card that offers 0% on both balance transfers and purchases, you could also have to pay a different interest rate on certain types of spending.

For instance, if you use a 0% balance transfer card to make purchases, you will incur interest at the card company's set rate.

What’s more, most card companies prioritise your payments toward the cheapest debts. That means you pay interest on the more expensive debts until you clear your 0% balance in full.

Read more…

• How to use 0% credit cards

• What happens when your interest-free period ends?

• What does 0% interest mean?

• Will 0% credit cards hurt your credit score?

What happens to your outstanding balance?

Any outstanding balance that remains after a 0% introductory period ends starts accruing interest at the card’s standard APR – often between 20% and 25%.

To avoid paying this, you have two main options.

• Use your savings to pay off the remaining balance.

• Transfer the debt to another 0% credit card that accepts balance transfers from your existing card.

However, it is worth noting that most 0% balance transfer cards charge a balance transfer fee, which is typically 3% of the amount you’re transferring.

Read more…

• Balance transfer and purchase credit cards

• Money transfer credit cards

• No fee balance transfer credit cards

Should you keep your card after paying off your balance?

Clearing the balance on a credit card doesn’t automatically close the account. If you want to close your account, you need to contact your card provider.

However, closing the account may not be the best move financially, and it’s important to consider the pros and cons of keeping a credit card after paying off your balance. 

Pros

• Surprisingly, having unused credit card accounts can positively influence your credit score because you have a lower credit utilisation rate

• Keeping a credit card for a long time suggests you are a loyal customer, which can help your credit score

• Some credit cards also offer benefits, such as air miles or rewards, although this is rarer with cards that offer a 0% introductory period

Cons

• Having several credit cards makes you an easier target for fraudsters

• Keeping a credit card account open can tempt you into spending more than you should, which you then need to pay back along with any interest on debts you build up

• You may have to pay an annual fee to keep your account, even if you don’t use the card 

Read more:

• Credit card balance transfers

• Credit builder credit cards

• Airmiles credit cards

• Cashback credit cards

How to find a new interest-free credit card

It’s easy to find a new interest-free credit card with Uswitch. Simply enter a few details, such as your name, address, and the type of card you are looking for, into our credit card finding tool.

You can also check out offers from different card providers by scrolling through our comparison tables. 

Finding the longest possible interest-free period with 0% credit cards is essential. However, you should also check the balance transfer fee. There’s no point paying a higher fee for a longer 0% period if you can clear your debt in a shorter time.

If you’re moving a balance from another credit card, you also need to check the card you are considering accepts transfers from your existing card – they won’t if the card providers are part of the same banking group.

Finally, remember that the best deals are generally only available to higher earners with excellent credit scores. If you’re unsure what you’re likely to qualify for, you can find out using our credit card eligibility checker.