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Cheap Credit Card Loans

Get card 'loans' as low as 0%

Even the best buy loan under £2,000 is 15% APR. Instead, 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 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 score. 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.

Tesco’s* 12 months 0%, no fee

Longest 0% 'loan' period (though some will get a worse deal)

Halifax* 20 months 0%

The Halifax* card offers the longest deal, although there's a chance with this card that you could be accepted, but not get the full 20 months at 0%. If you're accepted and you have poorer credit you'll get only 16 months - not such a great deal. As the repayment period is so long, if you're planning on using this card as a loan - don't be tempted to spend more later, just spend once, and use the 0% period to pay off.

Need to knows
  • 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 20 month period (use the loan calculator to work out how much you need to pay).
  • The rate increases to 18.9% rep APR (21.9% or 25.9% for some) 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: 20 months 0%
  • Rep variable APR: 18.9% (See Official APR Example)
  • Min income: n/a | Card issuer: Mastercard
  • Minimum payment: Greater of 1% of balance plus interest, or £5
Tesco’s* 12 months 0%, no fee

Gives you a full 19 months if accepted

Tesco* 19 months 0%

The Tesco* card will either accept you or reject you, rather than accept you and give you a different 0% deal. The card also pays 1 Clubcard point per £4 spent (5 pts per £1 spent in Tesco). If you're using this card as a loan, don't be tempted to carry on spending on the card. Instead, consider the Clubcard points to be a bonus on your initial purchase.

Need to knows
  • 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 19 month period (use the loan calculator to work out how much you need to pay).
  • The rate increases to 18.9% rep APR after deal ends so pay it off or shift it to a balance transfer card.
  • Our what's the interest rate? calculator tells you how much this card will cost.
ELIGIBILITY CHECK NOT AVAILABLE
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

  • Spending length: 19 months 0%
  • Rep variable APR: 18.9% (See Official APR Example)
  • Min income: £5,000/yr | Card issuer: Mastercard
  • Minimum payment: Greater of 1% of balance plus interest, or £25

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

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
M&S* Fluid card 19 mths 18.9% You can use our eligibility calculator for this card
Bank of Scotland* Lloyds card 19 mths 18.9% You can use our eligibility calculator for this card
Clydesdale* TSB 19 mths 18.9% You can use our eligibility calculator for this card

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 shift cash straight 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 15%+ 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

Tesco’s* 12 months 0%, no fee

Lowest money transfer fee we've seen for a long time

MBNA Platinum* 24 months 0%

The MBNA Platinum* card allows you to do money transfers for a very low 2.69% fee. This gets you 24 months at 0%. It's not the longest 0% money transfer deal available, but it is the one that works out cheapest when you compare the length of the 0% deal and the fee you have to pay.

Need to knows
  • You must do the money transfer within 60 days of opening the account or you won't get the low fee deal.
  • Never withdraw cash and never spend on this card if you do a money transfer as it doesn't have promotional rates.
  • You'll pay interest at a massive 22.9% after the 0% deal ends, so make sure you've fully cleared the card by then.
  • Our what's the interest rate? calculator explains how much this card will cost you.
Eligibility Calculator
(MSE’s free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

  • 0% money transfer length & fee: 24 months 0%, 2.69% fee
  • Interest rate on money transfer after 0%: 22.9%
  • Representative APR on spending: 18.9% (See Official APR Example)
  • Min income: n/a | Card issuer: Visa
  • Minimum payment: Greater of 1% of balance plus interest, or £25
  • Any restrictions? Must transfer within 60 days
Tesco’s* 12 months 0%, no fee

Longest 0% money transfer period offered

Fluid* 29 months 0%

If you need the extra five months at 0% to pay off, the Fluid* card offers a 29 month 0% deal, though the fee's higher at 4%. Choose carefully, as it's almost always better to pay a slightly higher one-off fee, than five months of interest at 22.9%.

Need to knows
  • If you don't transfer within 60 days of opening the card, you'll have to pay a higher one-off fee.
  • Never withdraw cash and never spend on this card if you do a money transfer as they're not at the cheap rate.
  • The interest rate increases to a huge 22.9% after the 0% deal ends.
  • Our what's the interest rate? calculator tells you how much this card will cost you.
Eligibility Calculator
(MSE’s free tool)
APPLY*
(at lender site)

Protect your credit score and check chances of getting card

  • 0% money transfer length & fee: 29 months 0%, 4% fee (first 60 days, 5% fee after)
  • Interest rate after 0% money transfer: 22.9%
  • Representative APR on spending: 18.9% (See Official APR Example)
  • Min income: n/a | Card issuer: Visa
  • Minimum payment: Greater of 1% of balance plus interest, or £25
  • Any restrictions? Must transfer within 60 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

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Enter the details...
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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.

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.