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Cheap Credit Card Loans

Get card 'loans' as low as 0%

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Eesha

Updated April 2016

Small loans tend to be quite expensive. So, instead of getting a loan, manipulate a credit card to do it at a fraction of the cost. This is a full guide to turning plastic into a loan, letting you borrow much more cheaply and overpay or underpay without penalty.

But, this is a technique that needs you to be disciplined. You're not forced to pay a credit card off in the same way you are a loan, so you need to be strict with yourself for this to work. If that's you, read on...

Picking the perfect method

The cheapest credit cards can substantially undercut the cheapest loan rates for certain amounts, and allow totally flexible repayments. But you need to get smart, and make that plastic bend to your will.

There are a couple of methods, depending on what you need the money to do. Some are simple, others require a bit of playing about. Pick what you need from the options below.

"It ain't what you do, it's the way that you do it."

  • I want to cut the cost of existing credit card debts.

    This is easy. Special 'balance transfer' credit cards are designed for this purpose. They pay off one card with a new one, hopefully at 0% for a fixed period. This allows you to pay down the debt quicker.

    If this is what you need to do, don't use the methods in this guide. Instead, read Best Balance Transfers for the full rundown and all the current best buys.

  • I want to pay off an existing loan.

    If you want to make an existing personal loan cheaper, read Cut the Cost of Existing Loans first, as it isn't always simply a case of getting a lower interest rate to make it cheaper. Sadly, penalties can mean it’s not worth switching - the guide has a calculator to help you work it all out. If it doesn't work for you, try another option from the ones below.

  • I want to make a big one-off purchase(s), and can pay by card.

    The easiest way is to buy whatever you need on a card that has the longest 0% or low rate for purchases. In other words, it's interest-free (or low interest) on debts from spending, though you must make at least the minimum repayments. See the top 0% credit cards.

  • I need the lump sum in cash.

    moneymountainA lot of things fit into this category, from buying a new car from a garage that doesn't accept credit cards, to paying back a friend you owe money to.

    If you want to keep things simple, or are borrowing a large amount (over about £5,000), check out the normal Cheapest Loans guide.

    For anyone borrowing less, or happy to try something a bit more complex, you can get clever and use credit cards with a special feature to make big savings.

    Please read the whole of this guide in detail though, and ensure you understand it correctly before proceeding. A mistake could cost you big. Jump down to 'Plastic loans'.

Best Buys If you can use a card to pay

If you're going for the simpler route of spending on a cheap credit card, you'll need to apply for a new one - and remember this means passing a credit check. The crucial thing is to ensure it's fully repaid by the end of the 0% period, or switch the debt to a top Balance Transfer card.

Check your eligibility with NO credit file mark

You'll see that most cards in this guide have a link to our eligibility checker tool, which we've designed to allow you to see the probability of getting the card.

We do a 'soft' credit search which YOU can see, but lenders CAN'T, so it has no impact on your future creditworthiness - and lets you see the chance of you getting the card without applying for it.

We map the details you give us against lenders' criteria, and show your chances for all the 0% and long term purchase cards that we can do so for.

Here are the current best buys - more picks and info in 0% Credit Cards. For more card options, see the credit card guides page.

Sainsbury's card

Joint longest 0% 'loan' period

Sainsbury's Nectar* - 27 months 0% (18.9% rep APR after)

Sainsbury's* has just upped the length on its 0% spending card, meaning you can now get a massive 27 months interest-free on new purchases, the joint-longest offer we've seen.

You'll earn Nectar points on all spending, but don't use this as an excuse to spend more - just buy what you need for the 'loan' and then use the 0% period to pay it off.

Need-to-knows
  • New customers applying by 27 September 2016 will get 5,000 bonus Nectar points if they spend £800 in Sainsbury's in the first three months - but don't use this as an excuse to spend more than you normally would.
  • You get 2 points per £1 spent on Sainsbury's shopping and fuel, and 1 point per £5 spent elsewhere.
  • Make sure you fully clear the card(s) by the end of the 27 months or you'll be charged 18.9% interest on any remaining balance. Poorer credit scorers may get 21.9% or 28.9%.
  • You'll either get the full 27-month deal or you'll get rejected.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 27 months 0% | Card issuer: Mastercard | Min income: N/A
  • Rep variable APR: 18.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.25% or £5
Post Office 25 months

Joint longest 0% 'loan' period

Post Office* 27 months 0%

This Post Office* card also offers 27 months 0% on spending, though you have to make at least one purchase in the first three months. If you don't you'll only get the 0% deal for the first 16 months - which won't make it a good deal.

As the repayment period is so long, it's a great option to use as a loan, but make sure you aren't tempted to spend more later – just spend once and use the 0% period to pay the balance off.

Some of you have told us that when you apply it looks like there's a 0% period of just 16 months on spending but we've confirmed with the Post Office that as long as you make a purchase in the first three months, you'll get the full 27 months 0%.

Need-to-knows
  • If accepted you'll get the full 27 months at 0%, Post Office won't offer you fewer months.
  • Once you've done your 'loan' spending, lock the card away and set up a direct debit to repay a fixed monthly amount so the loan's cleared within the 27 month period (use the loan calculator to work out how much you need to pay).
  • The rate increases to 18.9% rep APR after the 0% deal ends so pay it off or shift it to a balance transfer card.
  • Our what's the interest rate? calculator explains how much you'll actually pay back.
Eligibility Calculator
(MSE’s free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

  • Spending length: 27 months 0%
  • Rep variable APR: 18.9% (See Official APR examples)
  • Min income: £8,000 | Card issuer: Mastercard
  • Minimum payment: Greater of 1% of balance plus interest, or £5
Clydesdale 26 months

Second longest 0% 'loan' period offered on a card

Clydesdale/Yorkshire* 26 months 0%

This card from Clydesdale Bank* offers a long 26 months 0% on spending so is a good option to use as a loan.

Need-to-knows
  • If accepted you'll get the full 26 months at 0%, Clydesdale won't offer you fewer months.
  • Once you've done your 'loan' spending, lock the card away and set up a direct debit to repay a fixed monthly amount so the loan's cleared within the 26 month period (use the loan calculator to work out how much you need to pay).
  • The rate increases to 18.9% rep APR after the 0% deal ends so pay it off or shift it to a balance transfer card.
  • Our what's the interest rate? calculator explains how much you'll actually pay back.
  • Yorkshire Bank* (eligibility calculator) also offers the same 26 month 0% deal, as it is part of the same banking group.
  • Spending length: 26 months 0%
  • Rep variable APR: 18.9% (See Official APR examples)
  • Min income: N/A | Card issuer: Mastercard
  • Minimum payment: Greater of 1% of balance plus interest, or £5
AA

Long 0% 'loan' period

The AA* - 26 months 0%

The AA* Dual Credit Card offers the same 26 months 0% on spending as the Clydesdale card above, so is another good option to use as a loan. You can use our eligibility calculator to check your chances of getting the card.

Need-to-knows
  • If you're accepted, you'll definitely get the full 26 months 0%.
  • Once you've done your 'loan' spending, lock the card away and set up a direct debit to repay a fixed monthly amount so the loan's cleared within the 26 month period (use the loan calculator to work out how much you need to pay).
  • Make sure you fully clear the card by the end of the 26 months or you'll be charged 18.9% interest on any remaining balance.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 26 months 0% | Card issuer: Mastercard | Min income: £8,000
  • Rep variable APR: 18.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.5% of balance or £5

Alternative 0% spending cards if you can't get the ones above

If you didn't find a card above to suit you, here are quick details of the next best cards - use the eligibility calculator for your chances of getting the card.

Card 0% length APR Eligibility Calculator
Barclaycard* 25mths 18.9% You can use our eligibility calculator for this card.
Halifax* 24mths 18.9% You can use our eligibility calculator for this card.
Lloyds* 24mths 18.9% You can use our eligibility calculator for this card
Sainsbury's* 24mths 18.9% You can use our eligibility calculator for this card
Virgin Money* 24mths 20.9% You can use our eligibility calculator for this card - are you pre-approved?
Tesco* 21mths 18.9% Eligibility check not available.
Amex* 21mths 22.9% You can use our eligibility calculator for this card.
  • Representative variable APR, the rate you are given may be different
  • See all Official APR Examples
  • (1) Poorer credit scorers could get fewer months.

Best Buys Turn a credit card into a loan

If you're after a card that does something other than money transfers, see the credit card guides page.

moneytransfer Some credit cards allow you to do money transfers, which shifts cash straight from the credit card into your bank account, so you owe that amount to the card instead. But the trick is to find a card that offers money transfers at a low interest rate. These cards are best for loans of less than £5,000 or so (as you're unlikely to get a credit limit much higher).

First and foremost, a huge warning. Never, ever withdraw cash and never try to spend on the credit card. Instead, just ask the card provider to...

"Do a money transfer to my current account."

The key to a money transfer is that you’re charged a special promotional interest rate. By asking this way, you'll get the cheap rate, and the cash will end up in your bank. For double surety, explain exactly what you think will happen, and get the card provider to confirm it.

Also, it's crucial you set up a direct debit to make AT LEAST the minimum repayment each month. If not, you’ll lose the special deal and pay the 20%+ APR on all debts. Though it's preferable to pay more than the minimum, so the debt is cleared by the end of the intro deal.

Like any credit card, you'll need to pass a credit check to be accepted. This also determines the credit limit you'll get too, so there's a chance you won't be given the amount you need. If you're concerned about this, reconsider a standard cheap loan.

Top 'money transfer' credit cards

WARNING! ONLY use the cards we specify below to do this. Money transfers are niche and very rarely available. Use the wrong card and the cost can be massive.

Time-limited 0% deals

Virgin Money* Card

Cheapest money transfer fee on the market

Virgin Money* 32 MONTHS 0%, 1.69% FEE

This Virgin Money* card gives more than two and a half years at 0%, for a market-leading fee of 1.69%. As with other Virgin Money cards you'll definitely get the full 0% period if you're accepted. Plus, our eligibility calculator can now tell you if you're pre-approved for this card.

Need-to-knows
  • You'll initially be charged a fee of 3.5%, then Virgin will refund the difference back to you within 14 days, making the effective fee 1.69%.
  • After the 0% deal ends if you've still got a balance on the card, you'll pay 19.9% interest a year on it, so budget to pay off within the 32 months.
  • This Virgin card also offers 0% on balance transfers for 32 months, with a 1.69% fee.
  • If you do a balance transfer, you'll pay interest of 19.9% a year on any remaining balance.
  • Always pay at least the minimum monthly repayment, or you'll lose the 0% deal.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Money transfer length & fee: 32 months 0%, 1.69% fee (min £3)
  • Annual interest rate on money transfers after the 0%: 19.9%
  • Representative variable APR on spending: 19.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repayment: Greater of 1% of balance plus interest or £25
  • Any restrictions? Must transfer within 60 days
mbna

Low money transfer fee, but shorter 0% period

MBNA* UP TO 24 MONTHS 0%, 1.99% FEE

This MBNA* card has a low money transfer fee, at 1.99%, but it's slightly higher than the longer Virgin card above. Our eligibility calculator can tell you if you're pre-approved for it, so it's another option if your chances of getting the Virgin Money card are low.

Need-to-knows
  • You must do your money transfer within 60 days of opening the card to get the promotional 1.99% fee and the 0% rate; do it later and you'll pay a 5% fee and 22.9% APR.
  • This card also offers 0% balance transfers for up to 32 months, with a handling fee of 1.14%.
  • Poorer credit scorers might get fewer months at 0%, instead of the full 24. Try our eligibility calculator to see if you're pre-approved for the headline deal.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
  • Never spend on the card, as there's no 0% period so it's at a much higher APR.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Money transfer length & fee: up to 24 months 0%, 1.99% fee
  • Annual interest rate on money transfers after the 0%: 22.9%
  • Representative variable APR on spending: 18.9% (Official APR Example)
  • Card issuer: Visa
  • Min income: N/A
  • Min repayment: Greater of 1% of balance plus interest or £25
  • Any restrictions? Must transfer within 60 days
virgin

Long money transfer card

Virgin Money* 36 MONTHS 0%, 2.39% FEE

This Virgin Money* card gives three years at 0% on money transfers, with a fee of 2.39%. So if you'll need 36 months to pay off the debt, it could be the best option. Plus, our eligibility calculator can now tell you if you're pre-approved for this card.

Need-to-knows
  • You'll initially be charged a fee of 3.5%, then Virgin will refund the difference back to you within 14 days, making the effective fee 2.39%.
  • In addition, this card offers 0% balance transfers for 36 months, with a handling fee of 2.39%.
  • You'll pay interest on any remaining money transfer balance at a rate of 20.9% after the 0% is over.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Money transfer length & fee: up to 36 months 0%, 2.39% fee (min £3)
  • Annual interest rate on money transfers after the 0%: 20.9%
  • Representative variable APR on spending: 20.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: N/A
  • Min repayment: Greater of 1% of balance plus interest or £25
  • Any restrictions? Must transfer within 60 days
mbna

Long money transfer card, but with a higher fee

MBNA* up to 36 MONTHS 0%, 2.99% FEE

This MBNA* card, gives accepted applicants money transfers for up to 36 months at 0%, for a higher fee than the cards above of 2.99%. Plus, some people with lower credit scores accepted for this card won't get the full 36 months at 0%, so it's worth looking at the Virgin cards above.

Need-to-knows
  • You must do your money transfer within 60 days of opening the card to get the promotional 2.99% fee; after this, the fee rises to 5%.
  • In addition, this card offers 0% balance transfers for up to 24 months, but with a handling fee of 3.45% – not great, so don't use the card for this.
  • Poorer credit scorers might get fewer months at 0% instead of the full 36 months.
  • You'll pay interest on any remaining money transfer balance at a rate of 22.9% after the 0% is over.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
  • Never spend on the card, as there's no 0% period so it's at a much higher APR.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Money transfer length & fee: up to 36 months 0%, 2.99% fee
  • Annual interest rate on money transfers after the 0%: 22.9%
  • Representative variable APR on spending: 18.9% (Official APR Example)
  • Card issuer: Visa
  • Min income: N/A
  • Min repayment: Greater of 1% of balance plus interest or £25
  • Any restrictions? Must transfer within 60 days
tesco

Longest money transfer card

Tesco* 40 MONTHS 0%, 3.94% FEE

This Tesco* card gives a massive 40 months at 0% on money transfers, the longest interest-free period currently available. However, it has a higher fee than the other cards in the guide, so consider if you'll need the full 40 months to pay it off before applying.

Need-to-knows
  • You must do your money transfer within 90 days of opening the card account to get the 40 months at 0%.
  • In addition, this card offers 0% balance transfers for 40 months, with a fee of 2.69%.
  • You'll pay interest on any remaining money transfer balance at a rate of 20.6% after the 0% is over, though some poorer credit scorers will pay up to 26.7% APR.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
ELIGIBILITY CHECK NOT AVAILABLE
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Money transfer length & fee: 40 months 0%, 3.94% fee
  • Annual interest rate on money transfers after the 0%: 20.6%
  • Representative variable APR on spending: 18.9% (Official APR Example)
  • Card issuer: Mastercard
  • Min income: £5,000
  • Min repayment: Greater of 1% of balance plus interest or £25
  • Any restrictions? Must transfer within 90 days

The 'What's the interest rate?' calculator

To see the cost of borrowing a lump sum on a credit card, pop your numbers into the calculator and it'll reveal the total interest and fees you'll pay, plus the equivalent of this as an APR. Then compare it to the best personal loan you could get.

Remember, if you borrow more after the initial lump sum, this will change the calculation entirely. Always work out a structured repayment plan to make this as cost-effective as possible - see below for the full technique.

What's the equivalent interest rate?

Compare true cost of borrowing a lump sum on a credit card

£
 
£
 
OR
 
months
Enter the details...
%
 
OR
 
%
 
 months
 
%
IMPORTANT: Only a rough estimate - please use only as an indication. Always do your own thorough checks before making any decisions.

Pay off the card like a loan

The final difference between a loan and a credit card is loans have structured repayments. The amount you pay back each month is fixed, so you clear the debt in a set time. So to truly replicate the discipline of a loan, you need to repay a fixed amount each month.

Simply pay the same amount you would’ve done if you’d got a standard loan, though as the interest is lower you’ll actually clear it more quickly. If you don’t know how much to pay, just get a quote from any lender.

You also have the advantage of flexibility

The magic of this particular solution is you now have the flexibility of a credit card for your debts. Therefore you could…

  • Pay off less a month than a loan would cost.

    This may sound good, but means you'll take far longer to clear the debt and pay much more interest. If you do this, keep it as short term as possible. Though if you're focussing on repaying other more expensive debts, it's a good thing.

    You'll always need to pay at least the card's minimum repayment, usually 2% to 3% of your outstanding balance, so you could have to pay a little more in the first few months. Ideally though, you should pay more - see Danger: Minimum Repayments.

  • Pay it off more quickly.

    The opportunity to overpay a loan without penalty is great. It means you can throw more cash at the debt to get rid of it quicker while paying less interest.

Never spend on a 'plastic loan' card

Adding further spending to your long term debt card usually isn't a good idea. You have a limited time to pay off, and additional debt will throw out your repayment budget.

If you've done a money transfer, don't spend at all on that card, as you'll end up paying 18 or 19% interest on your purchases. The lender will put any repayments towards the most expensive debts first, which is good, but it'll take even longer for you to totally pay off the card. If you need a card for spending, see Top 0% Cards.