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What you should know about 0% purchase credit cards

0% cards offer a set period of no interest on purchases. Here’s what you should know to make the most of the offer and avoid paying unnecessary fees.

Paying with credit card

Looking for a 0% purchase card?

At ClearScore, you can browse a huge range of credit card options.

See my card offers

Now and then you will see credit cards advertising 0% on purchases for a set period of time. You might think be thinking to yourself, “0% interest on a credit card? This sounds too good to be true!”. Well, the good news is that these offers - if used wisely – can offer fantastic value. This article will explain how to make the most of your card and avoid paying unnecessary fees.

For this guide, we’ll be using the example offer: 0% on purchases for 12 months.

1. Research the 0% purchase card offer

Before you apply for the 0% purchase card, make sure the offer is still valid. Lenders will always state when you have to apply and be approved by (i.e. the offer expiry date).

We work with our partners to gather some of the best offers in the market. You can start your research by checking out credit cards on ClearScore. It’s free and it won’t affect your credit score.

Login to ClearScore to check your credit card offers.

2. Apply for the offer

Most applications will ask you for the following information. Make sure you have these so you can finish your application in one session:

  • Payslips for the last 3 months
  • Information about your regular expenses and other liabilities

Pro tip: You may want to include a buffer and apply ahead of time because some applications may take up to 5 business days to be approved - especially if it’s a very popular offer. Don’t wait too long because your application may get approved after the offer ends.

3. Purchase what you like during the offer period

Now for the exciting bit - you can now purchase things and pay no interest for the next 12 months. So that new washer or fridge you’ve just bought can be paid off in small chunks over the next 12 months with no interest.

4. Pay at least the minimum every month

Make sure you pay the minimum repayment amount every month (usually 3% of the amount you owe).

This is important because you must make these payments to remain eligible for the 0% offer. If you miss these payments the bank may end the 0% offer early and charge you the normal interest rate and you may incur a late fee as well.

You’re probably thinking, “If I’m paying no interest how does the bank make any money? Why would they give me this offer?”.

Great question. While it’s true that traditionally banks make money from interest, these offers make money through other methods.

1. Annual fees

Banks can charge an annual fee when you sign up to the 0% purchase offer. In these cases, you’ve effectively paid upfront to access the 0% offer.

2. Only the purchase rate is 0%

It’s important to remember the 0% offer is only on purchases. If you intended to do a balance transfer from another card or make a cash advance, take some time to read the terms and conditions. You’ll find banks often charge a separate higher interest rate and can charge you an upfront fee as well.

3. You may not pay, but the shops will

Maybe you’ve seen the small sign at the cash register saying there is an additional fee for paying with cards? This is called an ‘interchange fee’ and is somewhere between 0.25% - 2% of the price, so every time you pay with your credit card, the banks make a small amount in fees. Some shops choose to pass on some of these costs to customers, but many also accept it as part of accepting credit cards.

4. Pay off your purchases before the offer ends

Our statistics show that 24% of Australians still owe an amount when their 0% offer ends. After your offer ends the bank will start charging the normal interest on the amount you owe which can quickly spin out of control. So make sure you pay it off to avoid the extra cost.

In conclusion, 0% purchase cards are great for splitting up the cost of big purchases or even everyday spending so you can keep your money in a savings account for longer. Remember for banks to make money on these offers, they rely on people like you forgetting your payments or spending a little too much. Control your spending, stay within your budget and thank the bank for your next interest-free fridge.

The banks may set the rules, but that doesn’t mean you can’t play by their rules and win.


Ash spends far too much of his free time researching credit card deals (when he's not learning to cook, that is). He's done his time at the Big 4 banks and he's seen the light. Now, he's bringing his experience of growing up in a single parent household and helping to manage the family budget to ClearScore, in a bid to make money work better for everyone.