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How you can borrow money and pay no interest

You’ve read the headline and you are thinking – “This sounds too good to be true”, right? Who on earth is going to want to lend you money and not require you to pay any interest on the money borrowed?

Well perhaps the title is a little disingenuous, as it is true that there are no interest-free personal loans available, but there are other alternative ways you can genuinely borrow money without paying any interest whatsoever. Some of these methods will require adhering to specific rules or being in a specific circumstance, so not every method will be suitable for every person.

With the caveats out of the way and without further ado, let’s jump right in…

Credit card with 0% interest on purchases.

There are credit cards out there that offer 0% interest on purchases for a specified period of time. This time can range from just a few months, right up to more than two years (at the time of writing) – although the longest 0% cards are reserved for people with good credit scores.

There are a few things you need to be careful about with 0% interest cards. You need to ensure that you make at least the minimum payment each month. If you ever miss a payment or pay late then you are likely to lose the privilege of the zero percent interest and your card balance will suddenly be subject to the standard interest rate – which is often relatively high.

You also need to be sure that you have cleared your balance by the time your interest-free deal ends or, again, the balance will be subject to the standard interest rate.

But if you’re confident you can manage the repayments this could be a really good way for you to make a large purchase, spread the payments out over a number of months, and pay no interest at all. Note that the length of the 0% deal and the credit limit you may be offered will vary depending on your credit score.

0% balance transfer credit card

If you have an existing balance on a credit card that you are paying interest on, then flipping that debt over to a 0% interest balance transfer card could save you a packet. You should note that transferring a balance over to one of these cards will usually incur a fee (often a percentage of the balance that is being transferred) – so it isn’t really in the same sense that a 0% interest on purchases card is, but it should still be significantly cheaper for you.

Interest-free overdraft

Many bank accounts offer an interest-free overdraft as part of a set of incentives offered to try and tempt customers to switch their allegiance. The length of this interest-free period is often quite short – usually between a few months and a year – after which time it will likely revert to the standard overdraft interest rate which can be quite high (whilst writing this article, I saw one account with Nationwide that reverts to nearly 40% EAR after 12 months interest-free).

Also, these interest-free overdrafts may be associated with accounts that charge a monthly or annual fee – so be prepared for that.

But if you just need interest free cash for a short period of time, this may be a very viable option.

Paypal credit

A bit of a different option here. Most people are probably familiar with Paypal as being the preferred payment method and arbiter for eBay purchases. But these days Paypal is more than just eBay’s payment gateway.

One of their products is Paypay Credit and the deal is quite simple. Just spend more than £99 in one transaction and you will get 4 months to pay that money back interest-free. You can make as many +£99 purchases as you like (up to your approved credit limit) and you will receive the 4 months interest-free on each of them.

What’s the catch? Well if you fail to pay the money back within the four months then you are charged interest on the remaining balance – and that interest rate is pretty high (I suspect you are spotting a pattern by now with these zero-interest deals).

But if you are confident you can repay that purchase within the 4 months then this may be a good alternative to a credit card for you. As with any credit, you will need to be credit checked and you could be refused the offer should your credit score not be sufficiently high.

So there we have it. Of course, not everyone will qualify for all of these methods and some may not qualify at all – it really depends on the strength of your credit history. If none of these options are right for you then you may want to look into borrowing via a personal loan or a longer-term low rate credit card. And as ever, should you be struggling with your debts then you should seek free advice from one of UK based debt charities such as Step Change or National Debtline.

Top tips for reducing how much you pay for petrol and diesel

Fuel is one of those annoying but necessary costs. The vast majority of us rely on our cars to get to work, take children to school, visit family and friends, do the shopping and much more. Quite simply, they are essential to our modern way of life. And what is also essential, is filling them up with fuel on the regular. With petrol currently costing approximately 25% more than it did just four years ago, filling our tanks can be a significant drain on our finances.

So it makes good sense to do all we can to try and reduce our spending on fuel. In this article, we have suggested several tips and tricks you can use to make more of your money at the pumps.

Find the cheapest pump near you

First things first, it makes sense to search around for the cheapest pump in your area. Some out of town supermarkets have been known to undercut the competition significantly on fuel prices in order to attract customers out to them, assuming that they will do some shopping in-store at the same time.

Luckily, that doesn’t mean driving around to every pump with a pen and paper keeping a meticulous log (although you can do that if you want). A much easier way is to check petrolprices.com and enter your postcode.

Doing this using my home postcode showed a difference in price of 10 pence per litre in my local area. That is a saving of £6.00 on filling up a 60-litre tank – so a fairly significant saving and worth going a little bit out of my way to take advantage of the cheaper fuel cost.

Sign up for a loyalty card

Most of the big petrol stations offer some sort of loyalty reward scheme, and supermarkets generally have their own loyalty cards that can be used at the pumps.

As an example, BP has the BPme scheme. With this, you earn 1 point per litre of fuel you buy. You can also earn points through shop purchases and using the car wash. When you get to 200 points you can take £1 off your fuel bill. Alternatively, you can use your points to buy gift vouchers from Amazon, M&S and more.

These savings are not huge, but they are still free money effectively, so worth taking advantage of.

Keep an eye out for supermarket offers

From time to time, supermarkets offer fuel promotions. These almost always involve a minimum spend in store for which you will earn a voucher entitling you to money off next time you fill-up. The discount offered through these vouchers varies but invariably gives you around 5 pence off per litre.

If you sign up to Martin Lewis’ from Money Saving Expert email, chances are they will notify you of any new fuel offers as and when they arise. Otherwise, just keep your eyes and ears peeled…

Make your car more fuel-efficient

Of course, it doesn’t matter how much you save on the fuel if your car is then so horribly inefficient that it burns it all up twice as fast as it should!

There are plenty of really simple ways to improve the fuel efficiency of your vehicle. These include:

  • Keep the tyres inflated to the correct pressure.
  • Minimise the amount of excess weight in the car. Empty your boot and don’t use it as an extension of your garage or attic.
  • Don’t fill the tank. A full fuel tank is heavy and the added weight is less fuel-efficient. Instead, opt for more frequent fills and only fill up to 2/3’s of the tank. The only exception to this is if you have a one-time use discount voucher.
  • Avoid using the air-con. Not everyone realises that air conditioning actually uses fuel, so you should avoid using where possible and open the windows instead. Although this is only true at lower speeds because at higher speeds having the windows open increases the drag on the car.
  •  Keep the roof rack off when not in use. Having a roof rank on top reduced the aerodynamics of the car and increase drag, consuming more fuel. Keep it in your garage unless you need it.
  • Consider driving more efficiently. Conscientious driving such as accelerating gradually, driving in the highest gear possible and avoiding braking unless necessary can all increase your overall fuel efficiency, giving you a couple more miles out of each litre of fuel.