At a glance
A 0% purchase card lets you pay for big expenses such as home improvements or a holiday upfront and repay interest-free over a set time
Benefits include spreading costs, keeping your savings intact and gaining Section 75 protection for most purchases between £100 and £30,000
Risks include high interest if you don’t repay before the end of the 0% period
Make regular repayments, set up a direct debit, and compare alternatives such as cash and personal loans to find what suits you best.
Can I use a 0% purchase card for a holiday or home renovation?
Yes, you can use a 0% purchase card to pay for a holiday or home renovation.
For example, your card could be used to pay for:
Flights, accommodation, or a holiday package
Renovation materials and decor.
You can then repay the credit card balance without added interest for a set time, as long as you make at least the minimum monthly repayment.
Bear in mind...
You should aim to clear the balance by the end of your 0% promotional period.
After this, you’ll be bumped up to the lender’s standard interest rate which is normally very high, and costs can soon add up.
Can I use a credit card to pay a building contractor?
Some building contractors are happy to take payment by credit card, while others may only accept bank transfers or cash. When it comes to paying contractors and suppliers for a home renovation project:
Always ask a contractor or supplier up front if they accept credit card payments if that’s important to you
Check whether the contractor will pass the cost of any credit card merchant fees on to you
Find out what credit card payment networks they accept – for example, they may accept Mastercard and Visa but not American Express.
Pros and cons of using a 0% purchase card for a holiday or home renovation
Benefits
Interest-free borrowing – unlike with a personal loan or a regular credit card, you’re borrowing money at zero interest for a set time.
Spread the cost – instead of paying everything upfront, you can divide the cost over your promotional period.
Hold onto savings – keep your savings and potentially earn interest while you gradually repay your card.
Extra protection – using a credit card to buy a holiday or pay a tradesman could give you more consumer protection thanks to Section 75.
Pitfalls
Higher rate of interest at the end of the deal – if you haven’t cleared your balance before the 0% rate finishes, you’ll face interest on the outstanding amount.
Potential time limit on purchases – some cards only apply a 0% rate to purchases made in the first month or two of you opening the account, even if you’re able to repay the amount at 0% over a longer period. If you’re paying your builder or holiday off in instalments, make sure your card doesn’t have this type of restriction.
Loss of promotional rate if you miss a payment – a late or missed payment normally means the loss of your 0% deal, a fee (often £12), and a hit to your credit score.
Taking on debt – if your financial circumstances change, you may struggle to repay – so it’s worth thinking about saving up and paying outright if you can afford to do so.
Overseas credit card charges – if you spend on your credit card while on holiday, you may be charged foreign exchange and cash withdrawal fees. If you want to use a credit card abroad, look into travel credit cards.
How to use a 0% purchase card responsibly for your holiday or home improvement
Below are some tips on how to manage and repay your credit card:
Estimate the total cost of your holiday or home improvements – while unexpected costs will always come up, try to plan your spending and repayments as best as possible. And do build a contingency fund into your renovation project.
Calculate your repayments – if you’re making one big purchase upfront, take the total balance and divide this by the number of interest-free months to work out your monthly repayments.
Set up a direct debit or standing order – ideally for the above calculated monthly amount to clear the balance by the end of the deal. If you can pay more, you'll clear your balance even sooner. But if you plan to pay off most of the debt further down the line, ensure your direct debit covers the minimum repayments at the very least.
Avoid new purchases – or keep them to a minimum, so you don’t increase the balance.
Note down the end date of the deal – this helps you avoid getting caught out and moved to the higher standard rate.
Have a backup plan – if you can't pay off the entire balance before the 0% period ends, consider shifting the debt to a 0% balance transfer card.
Alternatives to a 0% purchase card
If you're not sure if a 0% card is the right choice for you, here are some other options for paying for your holiday or home improvements:
Alternative | How it works | Pros and cons |
|---|---|---|
Personal loan | Borrow a fixed amount, repay in regular instalments over set term (with interest) | Predictable monthly payments, but you pay interest |
Use cash you’ve saved up | You don't take on debt or pay interest, but you’ll have less saved up for emergencies |
FAQs
Can I book a holiday on a 0% purchase card?
Yes, you can book a holiday on a credit card. You may also benefit from Section 75 protection if the total cost is between £100 and £30,000.
Can I use the same card for both my holiday and home renovation?
Potentially, yes, you could use the same card for holiday and home improvement costs. But how much you can spend depends on your credit limit and how quickly you can repay the balance. Avoid maxing out your card, as this can affect your credit score.
Is a 0% purchase card better than a personal loan for big expenses such as a holiday or home renovations?
The right credit option for this kind of spending depends on your specific financial situation.
A 0% purchase card allows interest-free borrowing if repaid in time, which can be cheaper than a loan
A personal loan offers fixed repayments over a guaranteed term, which can be helpful for budgeting, but you’re also paying interest on the balance.
Looking for something else?
Allie has spent her career helping people quickly understand complicated topics, to help them save money and focus on what matters. With almost 10 years’ experience writing, leading and managing content, she is an expert in personal finance and insurance products.
Ele Clark is an award-winning editor who has held leadership roles at Which? and news-stand publications in London and Dubai. She’s appeared across the press and media, including BBC’s Panorama. With almost 20 years’ experience in personal finance, insurance and consumer journalism, she leads a talented team at Compare the Market, creating insightful, accessible content to help people make informed financial decisions.
Sajni is passionate about finding money products to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.
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What our expert says...
"Using a 0% card for a larger spend can smooth out the immediate pressure on cash flow, which is often why it appeals. The real discipline comes afterwards, because the benefit usually depends on having a clear route to repay the balance before the promotional period ends."