Maximise your Avios, air miles and hotel points

What are the best points credit cards with 0% interest on purchases?

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The current marketing gimmick among credit card companies is to offer 0% interest on new purchases for a long period of time.

0% interest offers on balance transfers – albeit usually with a 3% fee – have always been popular but only work for people who carry a balance.  Those people are less likely than average to be Head for Points readers.

‘0% interest on purchases’ is valuable to anyone, however.  There is no need to pay your bill, apart from the minimum repayment, each month.  You can spend up to your credit limit and then settle the entire bill in two years or so, just as your 0% period comes to an end.

(You should only do this if a) you are 100% certain to have the money available at the end of the 0% period and b) you trust yourself to remember when the 0% period is coming to an end.)

Keep your money in the bank for an extra two years or so and you would generate an extra return for yourself.

What are the best options?

According to MoneyFacts, the best 0% deals on purchases are currently offered by loyalty credit cards, which is handy!   This allows you to earn points as you run up your purchases.

Best deal on the market against which you should judge the rest:

The best deal on the market is the Sainsbury’s Bank Nectar Purchase Credit Card (representative APR 18.9% variable) with 29 months of 0% interest on purchases.

The Nectar earning rate on this card is poor, however, at just 1 point per £5 spent.  That is just 0.1% back!  At Sainsbury’s, you earn a far better rate of 2 points per £1.

This card also has a sign-up bonus.  If you spend £250 in Sainsbury’s, either on food or fuel, in the first 40 days of having the card you will receive 5,000 bonus Nectar points.  These are worth at least £25 and possibly more if you save them for a special redemption offer.

Tesco Mastercard credit card

2nd best interest-free period on the market:

The second best deal is more interesting from an Avios perspective.  This version of the Tesco Clubcard Credit Card comes with 0% interest for up to 28 months.  The representative APR is 18.9% variable.

You earn 1 Clubcard point for every £8 you spend, rounded down to the nearest £8.  At 2.4 Avios per Clubcard point, you are getting a headline 0.3 Avios per £1 spent albeit you need to factor in the negative impact of rounding which will reduce this figure.

There is no sign-up bonus with this version of the Tesco Clubcard Credit Card.

Other Avios earning option – with sign-up bonus and no annual fee:

This version of the Tesco Clubcard Credit Card comes with 1,000 Clubcard points – worth 2,400 Avios or 2,500 Clubcard points – for signing up and making one purchase or a balance transfer.  You only get 17 months of 0% interest on new purchases, however.

The representative APR is 18.9% variable.

Lloyds Avios Rewards 2

Other Avios earning option – with annual fee and no sign-up bonus:

The Lloyds Avios Rewards card comes with 0% interest for 24 months on new purchases.  The representative APR is 23.7% variable including the £24 annual fee.

This is a dual pack of an Amex and a MasterCard.  You earn 1.25 Avios per £1 spent on the Amex and 0.25 Avios per £1 on the MasterCard.  The Amex rate is doubled for the first six months.

There is no sign-up bonus on this card.  The refer-a-friend deal appears to have been suspended on 31st December.

Other Avios earning option – no annual fee, sign-up bonus but strict earning requirements:

The HSBC Premier Credit Card requires you to have a HSBC Premier current account.  This is free but requires you to have substantial savings with HSBC or a £100,000+ salary.  Representative APR 18.9% variable.

The card offers 9 months of 0% interest on new purchases.  The Avios earning rate is excellent – you get 0.5 HSBC points per £1 spent (1 point per £1 for foreign spend) and these convert 1:1 into Avios or various other airlines.

Until 28th February, there is a sign-up bonus of £25 for taking out the card and making your first purchase.

Lloyds Bank Choice

Other Avios earning option – with annual fee and no sign-up bonus:

The Lloyds Choice Rewards American Express and MasterCard package lets you earn Avios if you convert your Choice Points.  The earnings rate is 1 Avios per £1 on the Amex and 0.2 Avios per £1 on the MasterCard.  The earning rate on the Amex is doubled for the first six months.

The card offers 24 months of 0% interest on new purchases.

The representative APR is 23.7% variable including the £24 annual fee.  As the earning rate is worse than the Lloyds Avios Rewards cards, with the same annual fee, we tend not to discuss this card on Head for Points.

Conclusion

As you can see, you don’t have to sacrifice Avios points if you want to take out a credit card offering 0% interest on new purchases.

Which card is best for you depends on your personal preferences on annual fees, the length of the 0% period you want and the rewards you want to earn.


Want to earn more points from credit cards? – November 2020 update

If you are looking to apply for a new credit or charge card, here are my November 2020 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here.

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these:

American Express Business Gold card

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

Comments (49)

  • the real harry1 says:

    Stoozing: rather than ferret around for bank a/cs offering a small % on your savings, if you have an offset mortgage (say) with a 3.69% interest rate then everything you add to your associated offset savings a/c effectively pays you that 3.69% interest.

    • Alan says:

      Totally agree – sadly(!) I’m on a 0.5% above base rate tracker 😉 Definitely always want to pay off highest interest debts first though, especially as saving yourself interest on a debt is always tax free, whereas savings interest is only free up to the relevant tax-free limit!

    • Rhys says:

      3.69% + tax at the relevant rate for many of us no?

  • JPR says:

    I had a Lloyds Avios Rewards card a couple of years ago and am currently a supplementary on my wife’s. Now that the sign-up bonus is gone, would they honour the double points for 6 months and the interest free period for purchases for previous customers, if I applied now?

  • rod says:

    Hi – a bit OT, but still on the theme of credit cards: I wanted to convert some Amex MR points to M&S vouchers today, but see that the minimum conversion is now 40,000 which equates to a £200 voucher. In the past I used to convert 5000 MR to £25 of vouchers but noticed that this is no longer available. In fact the minus conversion for other vouchers have also increased e.g. House of Fraser is now 10,000. Amazon and a few others are still a min. of 5000 MR. Has anyone else noticed this, or is it a system error?

    • the real harry1 says:

      Why would you take 0.5p?

      • rod says:

        I was planning on giving some gift cards as birthday gifts. Also we shop a lot at M&S food so they’re quite useful, not so bothered about the 0.5p value here. The rest of the points I will transfer to Avios at some point.

        • Genghis says:

          Rod – I’d be willing to buy avios off you at 0.5p with payment in M&S vouchers. I even have some lying around from when Tesco were selling them.

          Easiest way? Create another account and then that form part of my HHA?

    • Rob says:

      Highly likely Amex has simply sold out and is awaiting new stock.

  • Rob says:

    That’s ‘cos it has no rewards and has a shorter interest free period that the Sainsbury and Tesco cards.

  • Frenske says:

    AmEx used to offer this card to existing AmEx Gold Reward members including a sign-up bonus of 4000 MR (though I am 100% sure).

  • John Tickner says:

    Do Curve or Supercard purchases and cash advances count as purchases ?

    • Alan says:

      Yes, Curve/Supercard purchases and ATM withdrawals all go through as purchases to the underlying card.