Credit Cards — 0% On Purchases and Spending.
Credit cards which charge 0% interest on spending (also known as purchase credit cards) enable cardholders to borrow money to pay for the purchases they make without having to pay interest. Furthermore, 0% cardholders can, if they wish, pay off the cost of the purchase in monthly instalments. Although a 0% purchase credit card can be one of the cheapest ways to borrow, they are usually available only to individuals with the best credit scores.
As the interest-free arrangement will come to an end sooner or later, it is in the borrower’s interests to pay off what they owe on the card (if anything) before that happens. If they fail to do so, then he or she is likely to be charged interest on the remaining debt.
Paying for purchases with a 0% credit card also provides a degree of protection which paying by cash or debit card does not. Under the Consumer Credit Act and the Consumer Credit Directive, the cardholder can claim back the full cost of any purchase (up to £60,260) if the goods or services they purchase are faulty, or fail to be delivered.
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