TSB launches a 0% bank card providing 26 months interest-free: Is it value signing up?

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TSB has launched a 0 per cent credit card offering an interest-free period of up to 26 months, giving borrowers a huge amount of time to spread the cost of purchases.

The card also offers 0 per cent interest for up to 18 months on balance transfers, if you shift a balance in the first 90 days of taking out the card.

This deal trumps similar offers from Lloyds and M&S Bank, whose cards come with 0 per cent on purchases for up to 25 months.

Credit cards with 0 per cent interest on purchases are a cheap way to borrow money, provided you make the minimum monthly payments and clear the balance by the end of the interest-free period.

TSB’s new card is ‘especially useful if you’re planning on making a big purchase, including household appliances or a holiday. 

‘You’ll also get extra purchase protection, meaning you’re covered should anything go wrong,’ said Alastair Douglas, chief executive of personal finance platform TotallyMoney.

It’s important that you manage the credit card well, even when it has an interest-free period. 

For example, if you miss a monthly payment or go over your credit limit, the provider may remove your 0 per cent rate – leaving you with a beefy interest bill.

> Compare 0 per cent credit cards at Moneysupermarket* 

Better deals? TSB now has a 26-month interest-free credit card – but if you’re tempted to get it, you must play by the rules or face high bills

How does TSB’s interest-free card stack up?

TSB’s 26-month interest-free period is the longest available right now, but you might be offered a shorter introductory rate depending on your credit history.

Here’s a summary of the deal:

• Up to 26 months of interest-free purchases;
• Up to 18 months of 0 per cent interest on balance transfers made in the first 90 days;
• Low balance transfer fee of 3.49 per cent for the first 90 days;
• Pay through contactless, or set it up on Apple, Google Pay or Samsung Pay.

If you’re more interested in the balance transfer element, TSB is also offering a specific balance transfer card with up to 38 months interest-free.  

Both Lloyds and M&S Bank are also offering up to 25 months of interest-free purchases, while Barclaycard and MBNA are offering up to 24 months.

What to watch out for with 0% credit cards

When managed well, a 0 per cent credit card is very useful for spreading the cost of a big purchase.

But bear in mind you’re still borrowing money that eventually will need to be repaid in full.

‘What’s important is that you only borrow what you can afford to repay, and you don’t see the credit as ‘free money’. 

‘You can avoid this by not saving the card details to your phone or tucking the card away somewhere safe, so you don’t start using it for day-to-day purchases and outgoings,’ said Mr Douglas.

It’s also important you only apply for credit if you’re confident of being accepted, because too many failed applications can harm your credit history. 

It suggests to financial providers that you’re struggling financially.

Most credit card providers allow you to check your eligibility before you properly apply for credit, and you can also check your eligibility at comparison websites such as TotallyMoney and Moneysupermarket*.