NATWEST will offer credit card customers an interest-free repayment plan for expensive goods.

From today, customers can opt to pay off large purchases through an instalment plan rather then being charged normal credit card interest rates.

Customers will be notified via the banking app if an item qualifies for a payment plan only after they've bought it.

For purchases worth between £300 and £3,000, customers will be able to choose between five options to pay off the debts in six, nine, 12, 18 or 24 months.

The bank promises that the plan will "always be cheaper" than if a customer paid off the credit card debt over the same period paying normal rates.

For example, if you bought an £800 sofa using your NatWest basic credit card you would normally have to pay 9.9 per cent interest.

How to cut the cost of your debt

IF you're owe a lot of money, it can be really frightening. Follow these tips to take action and start dealing with your debts.

• Don't bury your head in the sand – Check your bank balance at least once a week. Understanding how you spend is the first step towards managing your finances.
• Start budgeting  – write down your weekly income then deduct essential bills such as food, energy, commuting and council tax.
  Whatever is leftover is your budget for the month. Set aside a chunk to pay down your debts and work out what you'll spend and save.
• Cut costs – look at ways you can cut your expenditure such as switching energy provider or swapping from named brands to supermarket essential options.
• Overpay your debts – The more you pay off the less interest you'll pay over time. This is espeically through for credit card debts. With loans or mortgages check first as there may be a mximum you can overpay.
• Prioritise – Things like rent or mortgages, council tax and energy bills may have serious consequences if you miss the payments.If you can afford to overpay, make sure you target the highest interest rates first.
• Get advice – If you can't afford what you owe – don't panic, there's plenty of free help available!
  Contact debt charity Stepchange, Citizens Advice or the National Debt helpline where experts can talk you through your options.
  You can also get help to prioritise debts and negotiate with creditors to set up affordable payment plans.

If you paid it back over six months your payments would be £138 a month including an extra £24 in interest.

Shoppers who bought the same sofa using a Very store card with 39.9 per cent APR can expect to pay £150 a month and £96 interest overall inclusive.

Morses Club charge 82 per cent interest for an £800 loan making the monthly repayments £166.97 a month, with a huge £201.84 interest in total.

If you opt for the NatWest repayment plan you’ll only need to pay back £133 a month and you won’t be charged any interest.

It's useful for users who want to spread the cost of a big purchase but remember you'll still need to pay the minimum payments for the rest of the debt on your credit card plus normal interest rates.

Another cheap way to pay for goods is using a 0 per cent purchase credit card where you can split the cost across interest-free up to 28 months.

Virgin Money offers qualifying customers an interest-free period on purchases that's four months longer than the longest NatWest repayment plan.

Purchase credit cards: What you need to know

PURCHASE cards can be a great way of spreading the cost of expensive items. But you've got to use them properly otherwise it could cost you.

Here are some tips from MoneySavingExpert on what you need to know:

Never miss a payment – Being in a 0 per cent period doesn't mean you don't have to make your monthly repayments. If you miss just one payment you'll lose your 0 per cent period all together and start being charged interest on your balance.

Clear your balance – If you don't clear your balance within the 0 per cent period, you'll start being charged interest. Work out how much you need to pay each month by dividing your balance by the number of months your 0 per cent period is and set up a direct debit for that amount.

You might not get the headline 0 per cent period – Only those with the very best credit histories will get accepted for the cards that have lengthy 0 per cent periods, and some providers could offer you a deal with a shorter period instead. Check the details of the card you're looking at to see what you might be offered below the headline offer.

You don't have to use mobile banking to qualify either – check out our guide to the best ones here.

Customers can cancel the NatWest repayment plan on the app at any time without having to pay a penalty fee but you will be charged your normal interest rates on the remaining amount.

If you miss two payments the cash will automatically be subject to the same interest rates you normally pay on the rest of your credit card balance.

Of course, you should only opt for the plan if you know you can afford to keep up with the monthly repayments – this might be more than the minimum charge.

Martin Wise, managing director of short term borrowing at NatWest, said: "Our Credit Card Instalment Plan gives customers an alternative way to pay off a large purchase in a simple and flexible way in our mobile app.

"We want to encourage our customers to take greater control of their borrowing, so when they told us they’d like more options for paying off larger purchases on their credit card, we created a product that gave them more options but also greater value, transparency and flexibility."

Shoppers who are already struggling to keep up with store card debts and switch to a 0 per cent balance transfer card to help you save up to £300.

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