Tesco launches market-leading 0% spending credit card: here’s how it compares

Tesco launches market-leading 0% spending credit card: here’s how it compares
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Tesco Bank has launched a new 0% purchase credit card, offering a 22-month interest-free period. So how does it compare with other 0% credit card deals? And what should you look out for? Here’s the lowdown.

What is a 0% credit card?

With a 0% purchase credit card, you don’t pay any interest when spending on it within the 0% period. Because of this, using a 0% card is one of the cheapest ways to borrow. In fact, if you use this type of card in the right way – by clearing your balance by the end of the 0% period – you can effectively borrow for free.

To use a 0% credit card correctly, you must be disciplined. That’s because if you don’t clear your balance by the end of the 0% period (or transfer the balance to another card), then you’ll start paying interest on your purchases. For this reason, only ever consider a 0% credit card if you know you’ll be able to manage it properly.

It’s also worth knowing that a 0% interest-free period doesn’t mean there’s nothing to pay. To keep the interest-free periods on these cards, you will have to make at least the minimum payment each month. The easiest way to do this is to set up a monthly direct debit.

For example, if a 0% credit card offers a 12-month interest-free period, you can make the minimum repayment for 11 months, and then clear your full balance by the twelfth month to avoid paying any interest.

For more information on how these cards work, see our guide on 0% purchase cards.

What is Tesco Bank’s new 0% credit card offering?

Tesco Bank’s new 0% credit card offers an interest-free period of up to 22 months. This is the longest 0% period on the market.

However, not everyone will get the market-leading 0% period. You may be offered 18 or 14 months at 0% instead, depending on your credit score and individual circumstances.

As an added boon, you can earn Clubcard points when you use the card. You earn five points for every £4 spent in Tesco, and one point per £8 spent elsewhere. Do note, however, that this applies to each transaction, so if you don’t spend at least £8 in one go (outside of Tesco), you won’t earn anything. At the end of the 0% period, the representative APR is 20.9%.

How does Tesco Bank’s 0% deal compare?

Tesco Bank’s new 0% credit card cannot be beaten, as long as you qualify for the full 22-month interest-free period.

However, there are a number of 0% cards offering slightly lower 0% periods.

If you’re a Nectar cardholder, Sainsbury’s Bank currently offers a 0% credit card with an interest-free period of up to 21 months – just one month less than the Tesco deal. You also collect Nectar points when you spend on the card – two points per £1 spent at Sainsbury’s and one point per £5 spent elsewhere. Plus, there are bonus Nectar points on offer in the first two months. You get an extra 500 Nectar points each time you spend £35 or more at Sainsbury’s, up to a maximum of 5,000 points. The representative APR on this card is 20.9%.

If that’s not for you, then both Barclaycard and Lloyds Bank have 0% credit cards offering up to 21 months at 0%. The representative APR on both of these cards is 21.9%. 

It’s worth bearing in mind that all of the 0% credit cards above are ‘up to’ cards. This means there’s a chance you’ll be offered a poorer 0% deal depending on your credit score and personal circumstances.

If you’d prefer a guaranteed 0% period, then M&S Bank offers 20 months at 0%, and if you’re accepted for the card, you’ll definitely get this length. You can also earn one point per £1 spent at M&S and one point per £5 spent at other retailers. The representative APR on this card is 21.9%.

What else do I need to know?

When you apply for any credit, including 0% credit cards, you’ll undergo a credit check. If you undergo too many checks in a short space of time, it could negatively impact your credit score. To limit the chances of this happening, you may wish to use our credit card eligibility checker before you apply for any particular card.

On a similar note, you may also find it useful to read our tips on how to improve your credit score

Keen to explore more 0% credit card deals? See our top-rated 0% purchase cards.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

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