Interest Free Credit Cards – Compare & Apply for an Interest Free Period Credit Card Offer
How Do Interest Free Period Credit Cards Work?
Credit cards offering an interest free period sound so enticing, yet not many people seem to have a full understanding of how they work. In order to get the most benefit out of interest free credit cards, it’s important to know how they work. Here is comparison of interest free credit cards.
Featured 0% Balance Transfer Card
Competitive balance transfer and purchase rate offer plus a $0 annual fee for the first year.
- $0 annual fee for the first year( $87 thereafter) annual fee
- 0% p.a. for 6 months (reverts to 19.24% p.a.) on purchases
- 0% p.a. for 6 months on balance transfers
- Cash Advance Rate of 20.99% p.a.
- 55 days interest free
- Minimum Income Requirement of $50,000 p.a.
0% Balance Transfer Credit Cards Comparison
How Interest Free Credit Cards Work
Most lenders are happy to advertise the existence of their interest free credit cards on offer. You might recognise various advertisements saying ‘up to 55 days interest free’ or something similar on the credit card you chose to apply for.
In essence, if you’re willing to operate your credit card responsibly, you really could benefit from having a constant interest free period. You won’t be charged any interest on the purchases you’ve made using your credit card.
What’s more, it’s not just an introductory offer, but one that is ongoing for as long as you operate your card the right way.
But do you really understand how these types of interest free credit cards work?
You should find that most credit cards offer an interest free period in which you’re allowed to pay for your purchases without being charged interest on the money you’ve spent for a certain amount of time.
As long as you’re prepared to repay the entire amount of your credit card balance before the statement due date each month, you’ll never pay any interest on the money you’ve spent.
Effectively, you’ll be benefiting from a perpetual interest free period on the money you spend on your credit card.
You don’t have to pay the entire payment in one lump sum. In fact, you could budget your income to repay a certain amount each time you receive your pay to try and make sure the balance will be entirely cleared by the time the due date rolls around.
Always remember to make your repayment to clear your entire balance a few days before the statement due date if you can. Don’t leave your payments until the last day simply because some financial institutions can take up to 5 working days to credit your account with the payment you made.
What Happens if You Don’t Repay Your Credit Card Balance?
Most credit card customers have good intentions. They fully intend to repay their credit card balances and try to keep their debt levels as low as possible, but the reality is most people simply lose track of payment times and payment amounts to end up in a spiral of growing debt.
If you don’t repay your credit card balance in full before the due date on your statement down to a zero balance, you’ll be charged interest at the purchase interest rate pertinent to your account.
If you hoped to benefit from interest free credit cards, it’s important to find a way to clear the total balance outstanding on your credit card each month. If you can do this, you won’t have to worry about credit card debt and you won’t be paying steep interest charges on the amounts you owe.
When Your Interest Free Period Doesn’t Apply
If you’ve been paying for your purchases using your credit card and repaying your balance on time, you won’t be charged any interest.
However, for those customers who withdraw cash from their available credit card balance, you may lose your interest free period. This is because most lenders will charge interest on cash advances from the date of the transaction.
You may also find that if you have a balance transfer card, your lender may not allow you to make use of the interest free period until you’ve repaid the entire balance amount you transferred over.
Of course, even though these things are true with most lenders, it is still possible to shop around to find a credit card issuer willing to include cash transactions as well as purchases in their interest free periods. This can be ideal for customers wanting to buy foreign currency or for withdrawing cash.
Choosing an Interest Free Credit Card
If you’re in the process of comparing interest free credit cards, be sure you look at how long the interest free period will extend. Choosing a longer interest free period can allow you a little more time to repay your balance without incurring any interest charges.
You should also try to check how the interest free period is being quoted. Most lenders will offer you of either from transaction date which means from the first day of the current statement month or from statement date which means from the date your statement is issued.
You should also have an awareness of the interest rate that may be charged on your purchases if you should happen to carry a balance over into the next month without repaying it. If possible, look for a low or competitive interest rate.
Another fee to check before you apply is the annual fee that can be charged for the use of your card.
Tips for Comparing & Choosing an Interest Free Period Credit Card
Comparing and choosing the right interest free period credit cards to suit you can be quite a simple task, but it’s important you understand whether this type of card will be right for your own financial needs.
Choosing an Interest Free Period Credit Card
Some types of customers are really able to benefit from interest free period credit cards. Unfortunately not all customers will receive the same benefits. Before you submit your application for one of these cards, you should try to determine if these will suit your own needs.
Who Will Benefit from Interest Free Credit Cards?
The types of customers most likely to benefit from interest free period credit cards are those who are diligent about repaying the entire balance of their credit card debt down in full each month.
If you’re happy to pay for your purchases on your credit card and then repay the amount you’ve spent on or before the statement due date, you’ll find plenty of ways to reap the rewards these cards have to offer.
Who Won’t Benefit from Interest Free Credit Cards?
You should find interest free period credit cards are not suited to customers who carry a debt balance from month to month. These types of customers may find more benefit from applying for a low ongoing interest rate card.
What to Look for in a Good Interest Free Period Credit Card
Even though lenders are happy to advertise terms such as ‘up to 55 days interest free’, it’s important to understand how these days are determined.
Before you sign up for your interest free period credit card, check first whether the interest free period is quoted as from transaction date or from statement date.
To give you an idea how this works: if you paid for a purchase on the first of this month and the due date for your payment is due on the 30th of the month, you’ll be getting your purchase interest free for 30 days.
However, if your card offers interest free from the statement date and your statement was issued to you on the 30th of each month, you could make a purchase on the 1st day of the month and know that your interest free days are calculated from the 30th of that month – not the month prior in which the statement was issued.
What to Watch For In an Interest Free Credit Card
Always check how much you’ll pay on your annual fees. Even though you might be able to get away with paying no interest on your purchases, you may be charged a higher annual fee.
You should also remember that banks offer these types of interest free days on purchases only. This means that you won’t benefit from the interest free period at all if you use your card for cash withdrawals or for balance transfers.
Subscribe to our newsletter and get "The Ultimate Guide to Balance Transfers"
If You Like This Post...
Get all the latest deals, guides and loopholes go in Credit Card Finder's free bi-monthly email. Don't miss out - join the thousands who get it emailed!
Ask A Question