How interest-free credit can help sales soar

Interest free credit offers your customers the opportunity to spread the cost of their purchase over a fixed time and with equal monthly payments, but without having to pay extra. Great for customers making larger purchases who can budget for a monthly expense without having to pay all up-front. 

Our consumer research shows that retail finance can be a great tool for driving sales, with 83% of consumers saying that purchasing with point of sale finance meant that they were able to spend more overall 1. The report also highlights that 47% say it’s more convenient, while 44% have said it helps them with budgeting. But it’s worth noting that 78% of consumers who haven’t used POS finance said that an interest-free option would increase their likelihood of them using it in the future.

Increasing the likelihood to spend

For many, committing financially to a big purchase for a long period of time can be a difficult decision to make. And if the finance comes with a high interest rate, it can become a burden – taking longer to pay off the amount owed and costing more overall.

Interest free credit (IFC), however, offers customers the convenience and flexibility of buying what they need to, at no additional cost. This is particularly helpful in an economic climate like today, where a new boiler for example can be costly but an essential purchase in winter this can become a budget friendly purchase for a traditionally expensive item.

And it pays off for retailers too as basket sizes have increased when the option is available 2. This is because customers are able to select and choose the specification on the products they really want which will cost more but still fits with their monthly budget with clear, regular payments that won’t change over time.

Staying ahead of competitors

As the UK economy faces an uncertain future, spending is carefully considered in many households across the country. A recent Barclays UK Consumer Spending Report pointed out that non-essential spending had fallen by 1.6% in 2020 3.

While households are increasingly weighing up payment options for their purchases, offering interest-free finance plans could give you that competitive edge and help close the spending gap.

Our research shows that 27% of consumers said that if finance options weren’t available, they would likely have gone elsewhere that did offer it 1.

In other words, interest free credit options are an added bonus that could drive loyalty and better customer experience, with large household brands offering 0% and advertising on major platforms its now become an expected offering.

Using it to your advantage

It’s important that you play your cards right when offering interest free plans. Choosing the right time and tactics when offering IFC could become an instrumental part of your business model.

"We’ve worked with a number of national and larger independent partners who have switched from products that apply interest and are less transparent to customers to an interest free credit offer and seen a large uplift in sales.

We have many examples of partners across different industries and sales channels switching from 14-20% APR offerings to 0% and witnessed at least x3 or x4 uplifts in sales. Marketing is also key to success and we have the experience and expertise to help with that, as well as access to data and a large customer base to help connect you with customers.

We now even have retailers who only offer 0% APR as a financing option and report higher customer satisfaction scores over other payment methods.” Richard Brassey, Head of Business Partnerships, Barclays Partner Finance  

Aside from ‘always on’ finance periods, many of our retail partners utilise finance offers during traditionally quieter times to help boost sales and customer re-engagement. In return for offering customers the ability to purchase and spread the cost with no interest, it could mean that they can afford to buy more items – and fill their baskets.

Drive sales with IFC solutions

Find out more about our IFC product, or take a look at our seamless retail finance application process. If you’d like to talk to a member of our team we’re happy to help, just complete our online call back form.

Get in touch

To discuss your business requirements and how Barclays can support you, contact us today.

A trusted brand

With retail expertise gathered over a decade in the industry, a partnership with us is more than just an off-the-shelf retail finance solution. 

Our capabilities

Available to our partners online, in store or as an omni-channel solution, our finance capabilities can be seamlessly integrated into your business. 


1 Barclays Partner Finance consumer research survey results - based on the responses of 1,000 consumers – October 2018

2 Barclays Partner Finance Point-of-sale consumer insights report - based on the responses of 1,026 consumers – October 2018