Santander 123 Credit Card Now Offers 23 Months 0% on Purchases and Transfers

Written by Karen Bryan

santander 123 credit cardThe Santander 123 Credit Card now offers an interest free period of 23 months on both purchases and transfers. There’s no balance transfer fee, but there is an annual fee of £24 for the card. If you hold a Santander 123 Current Account, then the £24 fee is waived for the first year.

You can earn £13 cashback from if you successfully apply for a Santander 123 Credit Card through the link on their website.

You also earn cashback on certain categories of purchases made with the Santander 123 Credit Card.

  • 1% cashback in major supermarkets
  • 2% in major department stores
  • 3% on fuel for your car, National Rail and Transport for London purchases (up to a maximum of £300 spend per month)

I worked out that I could more than cover the annual fee by cashback earned during the year, plus interest earned on the cash set aside every month to cover purchases made that month. If I put that cash into my Santander 123 Current Account, it would earn a gross rate of 3% (variable).

Personally, I’d prefer to have a straightforward 1% cashback on all purchases.  This would avoid having to think about which credit card to use for which purchases, e.g. if you used the Santander 123 Credit Card to pay £1,000 for a holiday, you’d earn no cashback. Whereas, with a 1% cashback on all purchases credit card, you’d earn £10 cashback.

This means that you’d need to have another cashback credit card to use for spends not included in the Santander 123 Credit Card cashback, in order to maximise your annual cashback earnings.

As I applied for a Santander 123 Credit Card in November 2014 when the offer was 18 months 0% interest on purchases only, I was a bit miffed when the interest free period was extended by 5 months and to include fee free balance transfers a few weeks later.

I decided to phone Santander to ask if I was eligible for the new promotion. They said I was eligible and that they would confirm this in writing within seven working days. It goes to show that it’s always worth asking.

This enabled me to transfer my balances from the Tesco 0% on Purchases Card and the Nationwide Select Credit Card, as the promotional 0% offer on purchases on both these cards expires in early Summer. This will allow me to earn interest on the cash set aside to pay off these cards for an additional 16 months.

Warning and Disclosure

You should only take out a 0% on new purchases card if you are absolutely certain that you will set aside the money to pay off the full balance at the end of the 0% promotion period. If you already have a credit card balance which you transfer to a 0% on balances card, you should set aside the cash to pay off the full balance at the end of the 0% promotion period. You also need to compare balance transfer fees on various cards to work out which will be cheaper for you, depending on the size of the balance you’ll transfer.

I will earn a referral fee if you successfully apply for a Santander 123 Credit Card through the link in this article. Bear in mind that the payment of cashback is never guaranteed.