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How a purchase card could help you with your Christmas shopping

Find out how a purchase card could help you spread the cost of your spending.


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Christmas is fast approaching. While buying gifts for everyone within the space of a month may seem perfectly doable, this could quickly backfire if you end up overspending and can’t afford to pay off your purchases.

If you want to make the most of shopping without bringing your finances under fire, you might want to consider using a purchase card.

What’s a purchase card?

A purchase card is a type of credit card that comes with a lower (or no) interest rate, to help you spread the cost of big purchases without paying extra. They’re specifically designed for shopping, which is ideal. This means they can be a very cheap way to borrow - and a way to boost your credit score - if used correctly.

Now, we’re not suggesting that once you’ve got a purchase card, you’re free to go wild and buy everything in sight. It’s still important to only spend within your means (you can read our top tips for spending wisely in the lead up to Christmas here).

But if you’ve got something expensive in mind, or you spot the perfect gift in the sale, and you can’t afford it upfront, a purchase card might benefit you more than your everyday credit or debit card.

Here’s how they work

Most purchase cards offer a low or 0% interest period for a matter of months, usually 6 to 29 months. During this time, you can buy expensive items upfront and then repay the cost in instalments as per your card’s interest rate.

For example, if your card has a 0% interest period of 12 months, that means you won’t pay a penny in interest on purchases you make with that card for a year, as long as you make the minimum payment each month. So you could put all your Christmas shopping on this card and pay it back in the New Year if that’s easier for you.

However, once this period ends, the interest rate will increase (the APR will generally range from 18% to 30%), so you’ll want to pay off your balance before the time’s up.

As with all credit cards, if you spend between £100 and £30,000 on a purchase card, you’re covered by the Consumer Credit Act. So if your goods turn out to be faulty or get lost or damaged on their way to you, your card provider is equally liable for making sure you get your money back.

The rules still apply

Don’t forget that a purchase card is still a means of borrowing money, so the usual credit card rules are still valid. Remember that the interest offer only applies to purchases (online or in-store), so you’ll still be charged interest on cash withdrawals or balance transfers.

You’ll also need to make the minimum repayment every month. The minimum payment will be at least 1% of what you owe (or no less than £5), plus any charges and interest if you don’t have a 0% deal. We recommend trying to pay off your entire balance every month where possible, if you want to avoid paying unnecessary interest or getting into debt that you can’t pay off.

What happens if I can’t pay?

If you fail to pay back your balance within the interest-free period, or if you break the card’s terms, you’ll be charged interest and fees. That’s why it’s a good idea to make a note of the date your interest period ends, so you don’t forget to pay off your balance in advance. Why not set up a direct debit to be extra safe?

If you find you can’t pay it all off before the interest rate goes up, you could move your remaining balance to a balance transfer card before the time’s up and continue paying it off at a 0% interest rate. But again, the low interest rate on a balance transfer card will only be offered for so long, and you don’t want to get into the habit of constantly moving your balance around to avoid paying interest.

If you miss a payment altogether, you could be charged a late payment fee, and your provider might end the 0% interest deal on your card and start to charge you interest on your balance. They might also cancel your interest offer if you go over your credit limit, so try to spend no more than 30% of your credit limit at any one time.

How to find the right purchase card for you

There are plenty of purchase cards available, and it’s worth comparing the offers available to you to find the best deal. You’ll want to look for the card that offers you the longest interest-free period, and the best terms. You can see which purchase cards you’re eligible for at any time in your offers section.

Be sure to check the fees that come with the card - ‘interest-free’ doesn’t always mean ‘fee-free’, and you don’t want to be caught out. It’s also a good idea to look at the card’s APR after the initial interest period ends, so you have an idea of how much you’ll be charged on your remaining balance if you don’t pay it off in time.


Frankie takes the often confusing world of finance and makes it clear and simple, to help you get your money sorted.