Interest-free periods on credit cards are getting longer as competition in the sector intensifies.
As companies fight to have their offering top the comparison charts, the longest ever interest-free purchase term is now available at 31 months.
Sainsbury’s Bank has launched its Purchase Credit Card Mastercard with the 31-month interest-free purchase period, and also includes a 3-month interest-free balance transfer.
Not far behind comes the Halifax, who offer a 30-month interest-free purchase period, and back that up with a longer 6-month interest-free period for balance transfers.
Possibly topping both offers though, could be the Everyday Credit Card Mastercard from Santander. This card offers a 30-month interest-free period for BOTH purchases and balance transfers, ensuring two and a half years of interest-free enjoyment.
Managed properly, these cards could be used as an interest-free loan to pay for large purchases such as a holiday. As long as you ensure that you never miss a payment and make at least the minimum payment, or one thirtieth of the full amount whichever is larger, you will never pay interest on the initial amount.
You must however ensure that you can afford the repayments as with any finance.
If at any time the minimum payment is missed you could lose the introductory interest-free offer and also be charged penalties.
Consumer credit card debt is rising in the UK as many people take advantage of low interest rates without a proper plan in place to pay the credit back.
Interest rates charged at the end of the interest-free period are usually in excess of 20 per cent APR as well, so you must ensure that the debt is cleared in the stated introductory offer period.
Setting up a direct debit or standing order is probably the best way to ensure that payments are not missed, then you can enjoy lengthy interest-free credit without even having to visit a sofa sale!