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Cheap Credit Card Loans

Get card 'loans' as low as 0%

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Eesha

Updated September 2017

Small loans tend to be expensive. So instead of grabbing a loan, you can manipulate a credit card to borrow at a fraction of the cost. This is a guide to turning plastic into a loan, letting you borrow cheaply and overpay without penalty.

You can do it in one of two ways – with a card that charges 0% interest or a 'money transfer', where you get a card that pays money into your bank. You then owe the card firm the money at 0% for a small fee. But these techniques require discipline – as you're not forced to pay off a credit card in the same way as a loan. So if you can be strict with yourself, read on...

The seven golden rules

The cheapest credit cards can substantially undercut the cheapest loan rates for certain amounts. And they allow totally flexible repayments. Though to make the most 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 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 our 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 isn't usually a good idea. You have a limited time to pay it off, and additional debt will throw out your repayment budget.

    To make sure you only spend your loan amount, consider stashing your card in a waterproof bag, then pop it in a bowl of water and in the freezer (that way you put your spending on the card on ice and won't be tempted to use it again).

    Quick questions

    What happens if I 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 that loans have structured repayments. The amount you pay back each month is fixed, so you clear the debt in a set time. Therefore to truly replicate the discipline of a loan, you need to repay a fixed amount each month. 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 be charged hefty interest (typically 18.9%) on existing debt – so budget to make sure 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. However, 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 your free 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 behaviour.
    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, and 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 give.

    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

Longest 0% period PLUS get 5,000 Nectar pts if you spend £350 in Sainsbury's

Sainsbury's Nectar* – 32 months 0% (18.9% rep APR after)

This Sainsbury's* card offers the longest 0% period, and if accepted you'll definitely get the full 32 months. You'll also earn Nectar points on all spending.

Plus, you'll get 1,000 bonus Nectar points worth £5 each time you spend £35+ in Sainsbury's in the first two months from receiving your card (max 10,000 points, worth £50). Doing a big shop? You can split it into smaller £35 chunks to max the bonus, getting 1,000 points on each transaction.

Need-to-knows
  • New customers applying by Thu 28 Dec will get 1,000 bonus Nectar points worth £5 each time they spend £35+ in Sainsbury's in the first two months from receiving their card – but don't use this as an excuse to spend more than you normally would.
  • You can also shop online at Sainsbury's to trigger the points bonuses, but buying fuel at Sainsbury's petrol stations doesn't count.
  • You need to give your Nectar card number when you apply for the credit card.
  • The bonus points will be added to your Nectar account within 60 days of your credit card statement date.
  • 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 32 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 32-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: 32 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
Santander - 30 MONTHS

Long 0% spending card and if accepted you'll get the full 0% period

Santander* – 30 months 0% (18.9% rep APR after)

This Santander* card offers another long 0% spending period, and if you're accepted for the card you'll definitely get the full 30 months.

You can also earn cashback at certain retailers of up to 25%, though don't use the offers to tempt you to buy anything you don't need.

Need-to-knows
  • You'll either get the full 30-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%.
  • Make sure you fully clear the card(s) by the end of the 30 months or you'll be charged 18.9% APR on any remaining balance.
  • This card also offers balance transfers for 30 months at 0%, though you'll pay a 2.75% 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: 30 months 0% | Card issuer: Mastercard | Min income: £7,500
  • Rep variable APR: 18.9% (see Official APR Examples)
  • Minimum repayment: Greater of 1% of balance plus interest, or £5
Post Office - 30 MONTHS 0%

Long 0% spending card

Post Office* – 30 months 0% (18.9% rep APR after)

This Post Office* card offers the same 0% period as the Santander card above, and like that one will give you the full 0% period if accepted.

Need-to-knows
  • You'll either get the full 30-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%.
  • Make sure you fully clear the card(s) by the end of the 30 months or you'll be charged 18.9% interest on any remaining balance, though some poorer credit scorers could pay 22.9%.
  • This card also offers balance transfers for 30 months at 0%, though you'll pay a 2.75% fee to transfer your debt to the card.
  • Always pay at least the minimum monthly repayment, or you'll lose the 0% deal.
Stats box
  • Spending length: 30 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% or £5

For the full range of cards, see our 0% Cards guide or the 0% Cards Eligibility Calculator.

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

Some credit cards allow you to do money transfers, which shift cash straight from the credit card into your bank account, so you owe that amount to the card instead. Yet 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 fee for a 0% money transfer

Virgin Money* 25 MONTHS 0%, 2% FEE

This Virgin Money* card gives more than two years at 0%, and it has a lower fee than the cards in the section below, so it's a good option if you think you can clear the debt in time. As with other Virgin Money cards you'll definitely get the full 0% period if you're accepted for this one.

Need-to-knows
  • 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 it off within the 25 months.
  • This Virgin card also offers 0% on balance transfers for 25 months, with a 1.5% fee. After this you'll pay interest of 20.9% a year on any remaining balance.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
  • Don't spend/withdraw cash on this card. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
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: 25 months 0%, 2% fee
  • Annual interest rate on money transfers after the 0%: 22.9%
  • Representative variable APR on spending: 18.9% (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
virgin money

Long money transfer card

Virgin Money* 36 MONTHS 0%, 2.9% FEE

This Virgin Money* card gives three years at 0% on money transfers, with a fee of 2.9%. So if you'll need 36 months to pay off the debt, it could be the best option. Plus, our eligibility calculator can tell you if you're pre-approved for the card.

Need-to-knows
  • In addition, this card offers 0% balance transfers for 36 months, with a fee of 2.9%.
  • You'll pay interest on any remaining money transfer balance at a rate of 20.9% after the 0% period is over.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
  • Don't spend/withdraw cash on this card. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
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%, 2.9% fee
  • 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

Longer 0% period than the card above, but with a higher fee

MBNA* up to 39 MONTHS 0%, 3.45% FEE

This MBNA* card gives accepted applicants money transfers for up to 39 months at 0%, for a higher fee than the card above, of 3.45%. You could be accepted for the card and offered fewer 0% months but if you try our eligibility calculator, it can tell you if you're pre-approved for this card – and if you are, you'll get the full 39 months at 0%.

Need-to-knows
  • You must do your money transfer within 60 days of opening the card to get the 0% period and lower fee. Transfers made after this will pay 22.9% interest and a 5% fee.
  • 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 39 – try the eligibility calculator to see if you're pre-approved for the headline deal.
  • You'll pay interest on any remaining money transfer balance at a rate of 22.9% after the 0% period is over.
  • Always pay at least the minimum monthly repayments or you'll lose the 0% deal.
  • Don't spend/withdraw cash on this card. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
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 39 months 0%, 3.45% 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 to get 0%

For the full range of cards, see our Money Transfers guide or the Money Transfer Eligibility Calculator.

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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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?

Get Our Free Money Tips Email!

For all the latest deals, guides and loopholes - join the 12m who get it. Don't miss out