Tesco Bank extends 0% purchase credit card to unprecedented 28 months
Tesco Bank has extended the offer on its 0% purchase credit card, charging no interest for an unprecedented 28 months.
The card is only available directly from Tescobank.com. Tesco’s best deal through aggregator sites is 17 months interest free purchases, with a 1,000 Clubcard boost (worth £10).
The new deal knocks Sainsbury’s Bank and the Post Office off the top spot for 0% purchase deals, both of which offer 27 months.
The card’s default interest rate is 18.9% representative APR, but some successful applicants will be offered a higher rate.
Similarly, most people who qualify for the card will be offered the full 28-month 0% period, though some will be offered 25 or 22 months.
This is now the longest interest-free deal for purchases on the market, and the fact you’ll earn Clubcard points on your spending is a nice extra – you get one point for every £4 spent in Tesco, and one point for every £8 spent elsewhere. One point is then worth 1p to spend in store, or you can quadruple points to spend on partner rewards, such as restaurant vouchers.
One drawback is that the card doesn’t offer eligibility checks, so you won’t know whether you qualify or not unless you apply, which will be noted on your credit record even if you don’t get offered the card.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.