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Card Interest Free

Many of today's credit card interest free periods cover both purchases and balance transfers, allowing customers to get the best of both worlds from a single credit card. This means that you can use your card to transfer an existing balance from another credit card and use it to pay for purchases without having to pay any interest on your balance for the length of the credit cards interest free periods.

However, it is important to remember that most cards offer longer 0% balance transfer periods than 0% purchases periods, so if you transfer a balance across AND use your card for purchases it begins to get a bit more complicated.

For example, lets say you have a card offering 15 months 0% on balance transfers, and 6 months 0% on purchases. If you transfer £1000 across to your new card, but don't use it for purchases, you will have the full length of the credit card interest free period on balance transfers (15 months) to pay off the balance. Now, if you were to make a £100 purchase, it must be paid off within 6 months, but here's where you need to be careful. Anything paid off on the card will automatically be deducted from the balance transfer amount, so after paying £100 off, you would have £900 owed for your balance transferred, and still £100 remaining for purchases.

This would mean that you would have to pay off the full £1000 before you could pay for the £100 of purchases made, which will effectively shorten the interest free period you originally had for balance transfers, so your balance transfer period would now also be just 6 months.