Many credit cards offer 0% interest on spending. This is usually offered as a special introductory rate reserved for new customers, and often comes with strict terms. What’s more, even if you’re accepted for the credit card there’s no guarantee that you’ll be offered the advertised rate of interest.
What if you could enjoy 0% spending on your existing credit card? Here’s an old little trick that allows you to do just that.
How it works
Let’s say you spend £500 on your credit card in January, and you receive your statement some time later in the month. After the statement date you buy £500 on a cancellable flight, or something else you can return. Once that £500 is charged to the card, you then cancel the flight and are refunded within 5 days. That’s it. The important bit is that the refund is received before the payment date set by your card provider.
The initial £500 spending is paid off by the refunded £500, and the new £500 worth of spending is charged to next month’s statement, meaning you’ve effectively spent at 0%.
Why it works
This trick works on all credit cards that use any interim payments to the card before payment date towards the minimum payment. e.g. Nationwide, Barclaycards, MBNA to name a few. It does not work on cards such as Halifax or Capital One, who do not change the minimum payment regardless of whether you pay in advance or not.
Technically this trick can be done forever, but as it’s a bit robbing Peter to pay Paul, you might only want to use it a few times to give you some breathing room every once in a while. If you are going to use this trick please spare a thought for the retailers and companies whose goods you’ll be returning/cancelling.