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Credit card holders 'may want to purchase large items before VAT increase'

Debit and credit card holders planning to buy big-ticket items in the near future may want to consider making the purchase before January 1st.

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24 December 2009

Credit card holders 'may want to purchase large items before VAT increase'”

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This is because the VAT rate will return to 17.5% from 15% on this date, resulting in a price increase on all items.

The VAT increase could make a significant difference in price on large items such as dishwashers and fridge-freezers.

An advantage of buying this type of item using a credit card is there is insurance on purchases should anything go wrong.

The VAT rate was reduced in the 2008 pre-Budget report from 17.5% to 15% on December 1st 2008.

Chancellor Alistair Darling implemented the reduction to encourage spending in the UK.

The reduction was to last for 12 months to revert back on January 1st next year.

VAT does not apply to goods such as basic foodstuffs and children's clothing and books.

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Credit Cards	0% Balance Transfers	0% Purchases	APR Representative (Variable)
	Tesco ClubCard Credit Card
	9 months	15 months	16.9^%
16.9% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.9% p.a(variable).
	Virgin Credit Card
	20 months	3 months	16.8^%
16.8% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.8% p.a(variable).
	Barclaycard Platinum with BT
	22 months	3 months	17.5^%
17.5% APR representative (variable). Based on a credit limit of 1200 and purchase rate 17.5% p.a(variable).
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