Credit Cards offer alternative to finance deals

People commonly turn to finance deals in order to pay for large purchases, but some will charge you for privilege through admin fees and interest charges and in some cases you may be restricted to certain deals.

However, there is another way around managing your payment that won't incur any extra charges.

With 0% purchases credit cards you can effectively 'buy now and pay later'. This type of credit card does not charge interest on purchases for the length of the 0% duration, so as long as you clear your balance within the interest free period you won't pay a penny extra.

The 0% credit cards market is extremely competitive, so as with any thriving industry, credit card companies continue to push each other in an effort to win more custom, making them more and more attractive to savvy consumers.

The amount you can spend on a credit card depends on the credit limit, which is usually decided based on your financial status. It is possible to be granted with some significant limits, for example the Sainsbury's Credit Card comes with 0% on purchases for up to 12 months, offering limits of up to £25,000.

This card also comes with nectar points awarded for your spending, plus 0% on balance transfers for the same period, allowing you to transfer other debts across to freeze any further interest charges being added, however as with all credit cards there is a transfer fee for using this feature – 3% in this case.

To get the most out of the interest free feature you should decide exactly what you plan to spend, then work out how much you will need to pay back every month to ensure the balance is cleared by the time the 12 month 0% duration expires.

For example, if you plan to purchase a new bed costing £1,500, simply use your card to make the payment then set up a standing order of £125 per month and you will have paid it off in 12 months without paying interest.

The Tesco Credit Card also comes with 13 months 0% on purchases, plus 500 extra Tesco clubcard points for customers who successfully apply online between 9th January and 3rd March 2011.

If you find you are unable to clear the card within the 0% introductory period then you will need to act fast to avoid interest charges. This is where a balance transfer credit card comes in handy, as you can shift the remaining balance across to another card and stop further interest for the 0% balance transfer period.

The Barclaycard credit card currently offers 0% on balance transfers for up to 17 months. You will be charged 2.9% on anything you transfer, but if you apply before January 31st you an qualify for a £20 discount on this fee.

An important thing to remember when using any credit card is to always pay at least the minimum required monthly payment. Failure to do so will result in charges and can also have a negative effect on your credit rating.