Credit cards allow you to borrow money and repay it at a later date. Using them correctly (i.e. repaying at least the minimum amount each month) can improve your credit score meaning lenders look upon you more favourably as they can see you pay your creditors on time. If you can’t afford the repayments or you can’t clear the debt within the specified 0% period, you could be hit with big interest bills.

Zero per cent interest cards are particularly popular. There are three main types.

0% balance transfer credit card

If you have existing debt on a credit card, a 0% balance transfer card allows you to transfer the amount to a new lender who pays off the debt for you. You then pay the new lender back, with no interest payable for the length of the introductory offer. After this time, the standard interest rate will apply.

Doing this should help you clear the balance more quickly. A point to note is that with a balance transfer card, you may need to pay a one off balance transfer fee, typically in the region of 2.5% to 3% of the sum being transferred to the new card. Also as a very general rule of thumb, the longer the 0% interest period, the higher the transfer fee is so you need to weigh up whether you can clear the debt within a shorter period of time as it could work out cheaper for you.

According to MoneyComms, the current best buys are MBNA (3.49% handling fee, 18.9% APR rep variable) and Halifax (3.48% handling fee, representative 18.9% APR variable) which both offer 0% for up to 41 months.

0% purchase credit card 

With 0% purchase credit cards, you can buy items and spread the cost without paying any interest – there is no transfer fee as with balance transfer cards but as with all 0% deals you do have to pay at least the minimum statement balance each month – usually 2% to 5% of the balance outstanding. Again the 0% deal is only available for the length of the introductory period after which time the rate soars.

The current best buy is from Tesco Bank, offering 0% interest on purchases for up to 28 months.

0% dual credit cards

This is where one card offers a long 0% period on balance transfers and purchases – for example, the AA is currently the longest dual card offering 26 months free on purchases (18.9% p.a) and balance transfers (18.9% APR rep variable), though it’s subject to a 2.98% balance transfer fee.