Nifty credit card users could benefit from £8.5bn card trick

Credit cardholders could reap the benefits of a £8.5bn windfall simply through some savvy spending.

With nine out of 50 card providers currently offering 0 per cent on purchase periods of between nine and 12 months, compared to an average of three to six months, UK householders have the opportunity to be big winners according to the UK price comparison website moneysupermarket.com.

Given that seven of these provides have introduced or improved on last year’s offering, it seems 0 per cent on purchases cards are becoming increasingly popular. New analysis shows how cardholders can use these cards to their advantage.

Rob Kenley, head of credit cards at moneysupermarket.com, said: "Using a credit card with a zero per cent purchase offer and investing the equivalent amount of money in a savings or current account is an extreme case of banks paying us for our business. The process of getting your hands on some of that cash is simple.

How does credit card this card trick work?

The average UK household spends £5,790 per quarter - £1,930 per month - on goods and services, such as transport, recreation, culture, food, drink and clothing.

So, based on an average credit limit of £6,000 the average UK household can spend £1,930 a month for three months on one of the new 0 per cent purchase cards, invest the same amount monthly in a six per cent plus savings or current account over the same period and gain £270 over a year – remembering always to repay at least the minimum card balance and clear it at the end of the offer period.

Kenley added: “This works on a similar principle to offset mortgages and for the two thirds of people who are able clear their balance every month this represents a perfectly viable way of managing their finances.

“They can also benefit from the fact that unlike long 0 per cent balance transfer cards 0 per cent purchase cards do not levy fees which means they can benefit from the full yield available on their high interest savings or current account.”