Barclaycard has reintroduced the three-month interest-free period on purchases on its Initial credit card.
Ordinarily 0% deals are reserved for borrowers with good credit ratings. However, the Initial card is designed for borrowers with no credit history at all, making the deal very attractive.
The Initial credit card
The 0% period is a great boost for borrowers, but just as important is what happens once than interest-free period comes to an end. The Initial card boasts a representative APR of 29.9%, significantly higher than most mainstream cards, but very competitive for credit builder cards.
The table below covers the five top cards designed for borrowers with either no credit history or a poor one and the interest rates they offer.
Your financial situation has improved in the last 12 months
You have not been declared bankrupt in the last 12 months
You've had no County Court Judgments or Individual Voluntary Arrangements in the last 12 months
You don't already have a Barclaycard
You've lived at your address for at least three months
Cards that offer a little extra
The Barclaycard Initial is the only credit builder card that offers a 0% period, but it's not alone in being a little innovative in the way it works.
For example, the Aqua Advance MasterCard initially comes with an interest rate of 34.9%, but you can cut that down to 19.9% if you manage the card well. So long as you meet your payments on time each month you can cut the interest rate by 5% a year, until the rate reaches 19.9%.
With Aqua cards you also benefit from a free credit checker.
There's also the Capital One Classic Extra, which pays cashback! You can get 0.5% cashback on all of your spending, and should you pay on time each month you'll be rewarded with a £10 annual bonus.
If you wear a uniform of any kind to work and have to wash, repair or replace it yourself, you may be able to reclaim tax paid over the last four years. For some people, this could mean a windfall worth hundreds of pounds
The interest you receive on savings accounts (with the exception of cash Isas) is automatically taxed at a rate of 20%.
Higher-rate taxpayers therefore tend to owe money on the interest they are paid throughout the year. If, however, you are on a low income or not earning at all, you should be able to claim all or some of the tax deducted back
You can apply for a refund of vehicle tax if you are the current registered keeper or were the last registered keeper of your vehicle that no longer needs a tax disc
If you pay tax on a company, personal or State Pension through PAYE (the system employers use to deduct tax from your wages), you may well end up overpaying
There is a limit to the amount you need to pay in NI, whether or not you work for an employer.
Instances in which you may find that you have overpaid include if you work two or more jobs and earn more than £817 a week and if you move from self-employment to employment, but continue to pay Class 2 National Insurance contributions