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Cheap Credit Card Loans

Get card 'loans' as low as 0%

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Eesha

Updated January 2017

Small loans tend to be expensive. So instead of getting a loan, you can 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 cheaply and overpay without penalty.

You can do it in one of two ways. Get a card that charges 0% interest or do a 'money transfer', where you get a card to pay money into your bank. You then owe the card firm the money at 0% for a small fee. But these techniques require 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...

The seven golden rules

The cheapest credit cards can substantially undercut the cheapest loan rates for certain amounts and allow totally flexible repayments. But to make the most out of a credit card you need to get smart, and make that plastic bend to your will. So before applying for a cheap credit card loan ensure you follow the seven golden rules.

  • Only borrow if it's planned, budgeted for and you can afford it

    Only borrow if you really must. If you're thinking of borrowing to fund your ongoing lifestyle - STOP. This is the worst type of borrowing as it means you're living beyond your means and risk a debt spiral. Avoid it. Use the Free Budget Planner, stop spending and cut your cloth accordingly. For a needed, planned purchase (Eg, a car for a new job, or annual car insurance as it's cheaper than monthly) minimise the amount you borrow and ensure you can afford to repay the debt before the 0% promotional period ends.

    Quick questions

    What if I want to cut the costs of existing debt instead?

    How can I cut the cost of an existing loan?

    What card do I use if I want to make a one-off big purchase?

    What if I need a cash lump sum?

  • Spend ONLY your loan amount then lock the card away

    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. To ensure you only spend your loan amount, consider stashing your card in a waterproof bag, then put this in a bowl of water in the freezer (so you won't be tempted to use it again).

    Quick questions

    What happens if I further spend on a money transfer card?

  • Pay off the card like a loan, in monthly instalments (set up a direct debit)

    The main 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. The easiest way to do this is by setting up a direct debit.

    Quick questions

    Should I pay off less a month than a loan would cost?

    Should I pay off the card more quickly?

  • Never miss a repayment and aim to fully repay the card by the end of the 0% period

    Set up a direct debit for at least the minimum repayment as soon as you're accepted. Even though it's at 0%, or a low rate, you still need to make repayments. If you miss one, you'll lose your cheap deal – the rate will jump to the APR and you'll be hit with a £12 charge.

    Having said that, after the 0% period ends you'll begin to hefty interest (typically 18.9%) on existing debt - so budget to ensure the card's fully repaid before then.

  • Use our eligibility calculator before applying for a speedy check of which cards you're most likely to get - and protect your credit score

    Usually, the only way to know if you'll be accepted is to apply, but each application marks your credit file. But our 0% spending eligibility calculator quickly shows your odds of getting almost every top 0% spending card so you can find the ones most likely to accept you, thus minimising applications. If you're looking for a money transfer card, our money transfer eligibility calculator is best.

    Quick questions

    How does the eligibility calculator work?

    Will credit scoring affect the deal I get and my credit limit?

  • Or join our Credit Club for a full credit health check, including free your Experian Credit Score, Affordability Score and Credit Hit Rate

    The new MSE Credit Club is a game-changer. For years the credit market has been shrouded in mystery but our revolutionary tool brings together the key components to give you the full picture, and crucially, what it means for your acceptance chances and how to boost your creditworthiness.

    A credit score alone isn't enough to borrow, as there are other factors at play (it's why many with perfect scores still get rejected). Credit Club shows you...

    1. Free Experian Credit Score - how lenders rate your past credit behavior.
    2. MSE Affordability Score - how lenders assess if you can afford a product.
    3. Your Credit Hit Rate -
    how likely you actually are to be accepted when you apply.
    4. Credit Card & Loan Eligibility Calcs
    - what your odds are of getting specific top deals.
    5. How to improve your credit profile - we show where your profile's strong and weak, & how to improve it.

  • Understand 'up to' deals mean you might not get the headline deal you apply for

    There's a catch to watch out for. Some card firms give those with lesser credit histories fewer months at 0% than they advertise. You could, for example, apply for a 26-month 0% spending card, be accepted, but be given 20 months at 0%.

    We highlight cards that do this by putting 'up to' before their headline offer, and tell you the other 0% lengths they may offer in the write-ups of the products below.

    Quick questions

    Is there any way to know what deal I'll get before I apply?

    Why do lenders give some applicants worse deals?

Best Buys If you can use a card to pay - get 0% interest

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, unless it's a card offering pre-approval, you'll have to pass a credit check. Here are the current best buys:

Sainsbury's card

Joint longest 0% plus 5,000 Nectar points if you spend £250 in Sainsbury's

Sainsbury's Nectar* – 29 months 0% (18.9% rep APR after)

This Sainsbury's* card offers the joint longest 0% period on spending, and you'll definitely get the full 29 months if accepted. You'll also earn Nectar points on all spending, plus if you spend £250 in Sainsbury's in the first month, you'll get 5,000 bonus Nectar points worth £25.

More of a Tesco shopper? See below for a similar card offering one month less at 0% that offers Clubcard points.

Need-to-knows
  • New customers applying by 26 March 2017 will get 5,000 bonus Nectar points if they spend £250 in Sainsbury's in the first month – but don't use this as an excuse to spend more than you normally would.
  • You get two points per £1 spent on Sainsbury's shopping and fuel, and one point per £5 spent elsewhere.
  • Make sure you fully clear the card(s) by the end of the 29 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 29-month deal or you'll get rejected, unlike some cards in this guide where you may be accepted for the card, but given a shorter period at 0%.
  • 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
  • Spending length: 29 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
MBNA - 29 MONTHS

Joint longest 0% spending card

MBNA* – up to 29 months 0% (18.9% rep APR after)

This MBNA* card offers the joint-longest 0% spending period. However, some may be accepted and offered fewer 0% months – though if our eligibility calculator shows you as pre-approved, you'll definitely get the headline deal.

If you shop at Sainsbury's or Tesco, you may be better off with the cards above and in the table below which also reward you for your spending.

Need-to-knows
  • We say 'up to' 29 months as some poorer credit scorers may get fewer months at 0%.
  • Make sure you fully clear the card(s) by the end of the 29 months or you'll be charged 18.9% interest on any remaining balance.
  • This card also offers balance transfers for up to 29 months at 0%, though you'll pay a 2.95% fee to transfer your debt to the card.
  • 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
  • Spending length: Up to 29 months 0% | Card issuer: Visa | Min income: N/A
  • Rep variable APR: 18.9% (see Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, or £25
Virgin Money

New. Long 0% spending card

Virgin Money* – 28 months 0% (19.9% rep APR after)

This card from Virgin Money* offers a long 28 months 0% on spending, which you'll definitely get if you're accepted for the card – great if you need to spread out the cost of a big planned purchase.

Need-to-knows
  • Our eligibility calculator can tell you if you're pre-approved for this card.
  • Make sure you fully clear the card(s) by the end of the 28 months or you'll be charged 19.9% interest on any remaining balance.
  • You'll either get the full 28-month deal or you'll get rejected, unlike some cards in this guide where you may be accepted, but given a shorter period at 0%.
  • 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
  • Spending length: 28 months 0%
  • Rep variable APR: 19.9% (see Official APR Examples)
  • Card issuer: Mastercard
  • Min income: N/A
  • Minimum repayment: Greater of 1% of balance plus interest or £25
AA

Get £35 cashback when you spend £500 – and a long 0% period to boot

AA* – up to 28 months 0% (18.9% rep APR after)

The AA* Dual Credit Card offers just one month less at 0% than the longest cards, and if you spend £500 within 60 days, you'll also get £35 cashback – though don't use this as an excuse to spend more than you normally would.

Note that some accepted applicants will only get 22 interest-free months, which won't make it as competitive.

Need-to-knows
  • You need to spend at least £500 on the card within the first 60 days of opening your account to trigger the cashback. It'll be paid as a credit into your card account within 90 days of meeting the £500 spend.
  • You won't get the cashback if you pay late, bust your credit limit or already have an AA or Bank of Ireland credit card product (this includes Post Office credit cards).
  • Some poorer credit scorers accepted for the card will be offered 22 months at 0%, rather than 28, which isn't as good a deal.
  • Make sure you fully clear the card by the end of the 0% period or you'll be charged 18.9% interest on any remaining balance.
  • Poorer credit scorers could get a higher interest rate, up to 22.9%, but if you've cleared it by the end of the 0% period then this won't matter.
  • 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
  • Spending length: up to 28 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
Barclaycard 25mths

More than two interest-free years plus get £20 cashback if you spend £500

Barclaycard* - up to 25 months 0% (18.9% rep APR after)

This Barclaycard* has a decent 0% period of up to 25 months on spending and also offers £20 cashback if you spend at least £500 in the first 60 days - though don't use this as an excuse to spend more than normal.

Be aware that you could be accepted for the card and offered fewer months at 0%, which wouldn't make it a good deal.

Need-to-knows
  • To be eligible for the £20 cashback, you need to apply by Mon 6 Feb and spend at least £500 within the first 60 days of opening the account.
  • The cashback will be credited to your account within two working days of the spend being processed.
  • You won't be eligible for the cashback if you already have a Barclaycard.
  • We say this card's 'up to' 25 months as some may get 12 months at 0% depending on credit score.
  • Always pay at least the minimum monthly repayment, or you'll lose the 0% deal.
  • Make sure you fully clear the card(s) by the end of the 25 months or you'll be charged 18.9% interest on any remaining balance. Poorer credit scorers may get up to 29.9%.
  • You can also do a balance transfer with this card, getting up to 25 months 0% for a 1.49% fee.
Eligibility Calculator
(MSE's free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

Stats box
  • Spending length: 25 months 0% | Card issuer: Visa | Min income: N/A
  • Rep variable APR: 21.9% (See Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, 2.25% 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
Nuba*Nuba Up to 28mths (1) 18.9% You can use our eligibility calculator for this card – are you pre-approved?
TescoTesco Bank Up to 28mths 18.9% -
Post OfficePost Office 27mths 18.9% -
Santander*Santander 27mths 18.9% You can use our eligibility calculator for this card
Clydesdale*Clydesdale 26mths 18.9% You can use our eligibility calculator for this card
Yorkshire*Yorkshire 26mths 18.9% You can use our eligibility calculator for this card
Halifax*Halifax Up to 26mths (1) 18.9% You can use our eligibility calculator for this card
M&S Bank*Marks and Spencer 25mths 18.9% You can use our eligibility calculator for this card.
See all Official APR Examples. (1) Poorer credit scorers could get fewer months.

Best Buys Turn a credit card into a loan via a 0% money transfer

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. 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.

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.

Virgin Money* Card

Cheapest money transfer fee on the market

Virgin Money* 32 MONTHS 0%, 1.99% FEE

This Virgin Money* card gives more than two and a half years at 0%, for a market-leading fee of 1.99%. 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
  • 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 1.99% 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%, 1.99% 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.
  • After the 0% deal ends if you've still got a balance on the card, you'll pay 22.9% interest a year on it, so budget to pay off within the 24 months.
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%, 2.69% FEE

This Virgin Money* card gives three years at 0% on money transfers, with a fee of 2.69%. 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
  • In addition, this card offers 0% balance transfers for 36 months, with a handling fee of 2.69%.
  • 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%, 2.69% 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
virgin money

Longest money transfer card

Virgin Money* 41 MONTHS 0%, 3.79% FEE

This Virgin Money* card gives a massive 41 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 41 months to pay it off before applying.

Need-to-knows
  • If you're accepted for the card you'll definitely get the full 41 months 0%.
  • In addition, this card offers 0% balance transfers for 41 months, with a fee of 3.19%.
  • 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.
  • You must do your money transfer within 60 days of opening the card account to get the 41 months at 0%.
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: 41 months 0%, 3.79% 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

Cashback sites may pay you for signing up

As an extra boon, members of specialist cashback websites can be paid when they sign up to some financial products. Do check it's exactly the same deal though, as terms can be different. And remember that cashback is never 100% guaranteed until it's in your account. 

Full help to take advantage of this and pros and cons in our Top Cashback Sites guide.

'What's my 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

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

Cheap credit card loans Q&A

  • I already have a loan. Can I cut the cost of it with a card?

  • What if I can't repay the card in full at the end of the 0% deal?

  • What if the credit limit isn't high enough?

  • Can I withdraw cash on a credit card?

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