Credit Card 101: Knowing The Difference Between 0% Purchase and 0% Balance Transfer

Have you ever been so excited only to feel so down after? Imagine receiving a new credit card in the mail that boasts of a 0% interest. You then proceed to use your card for purchasing and balance transfers. However, when your bill arrives, you are shocked to find out that you were charged with interest. You then feel cheated by your credit card provider, but you soon realize that they are not to blame. Why so? The answer is simple: it is because you did not pay enough attention and jumped straight into using your card without thorough research and confirmation.

Let us help you solve that with this article. We want to keep you from committing such mistakes as well as feeling as such by differentiating 0% purchase and 0% balance transfers. While most people think that a 0% credit card applies to the two, it is not usually the case – that is too good of a deal to be true (you may find a bank or two that might, however). If you find yourself confused between the two, then keep reading as this may help clarify some things.

0% Purchase Credit Cards

A 0% purchase credit card means that you do not get charged interest should you make a purchase with the card. During the introductory period of the 0% promotion, you should take full advantage and make one big purchase that you can pay off in installments every month as banks usually tie up with select stores such as furniture shops, electronics stores, and home improvement stores. Some banks, however, offer a 0% interest free purchase on anything for the given time period. This is better for you, as you can also be making smaller purchases on the side without having to worry.

Say you would like to get a laptop. With your new credit card, you definitely could. The 0% interest rate would mean that you can continue paying every month (until your payment is over) with no interest at all. Essentially, you are buying on credit – and there is no catch to it – not until the introductory period, at least.

0% Balance Transfer Credit Cards

A 0% balance transfer card, on the other hand, only offers 0% on balance transfers. There are two ways in which you can do this. First is that they can either have the bank transfer the balance to one of your succeeding accounts by providing them with all necessary information. This is most especially helpful when you have an outstanding balance from your other card. With the help of the 0% balance transfer, you are essentially getting a loan for free. Take full advantage of that.

Second, your bank can send you transfer checks – these checks will be addressed to you and can only go up to the credit limit of your card. If you are low on cash at the moment and would need to make other certain payments as soon as possible, this could be very helpful as these checks will be deposited to your account. You can have them cashed at any point once deposited.

Remember, 0% balance transfer cards should only be limited to balance transfers as any purchase made with the card will be charged interest. With this said, this card is best used to pay off other balances with higher interests, such as a credit card bill with a higher interest as compared to this one.

While the 0% credit card is both enticing and intriguing, you need to first know which 0% is being offered to you – 0% interest on purchases or balance transfers? Though both are great, choose one that best suits your lifestyle. Some people may find the balance transfer aspect more helpful whereas others may find the purchases more helpful. Most banks will only offer one or the other as they earn through interest and other small fees. Hence, do your research and get a card that you know you can get the best use out of.

Knowing the difference between 0% credit card and other credit cards is just the start. Learn more at You can also check out for more credit card tips.
Learn more about the difference between 0% purchase and 0% balance transfer at We simplify the usually-complicated discussions so consumers can learn and spend wisely.