One of the more commonly found features on modern day credit cards is interest free days on purchases.
In it’s simplest form, this feature gives the card holder a certain amount of time after a purchase before they start incurring interest on the amount.
How the principle of an interest free credit card works
For example, on an interest free credit card, if John buys a shirt for $60 dollars, and has an interest free period of 55 days, he will then have 55 days in which to pay back the $60 dollars to the card, before he has any interest added.
It is very important to remember when using an interest free credit card, not to spend more than you can pay back within the allotted interest free period. As tempting as it may be to “splash the cash”, do remember that although this feature gives you a bigger window of opportunity in which to pay off the bill, it is rendered useless if you do not pay off the amount in full before the end of the interest free period. This is because if you fail to pay the full amount back in time, you then have to pay the interest, as well as the original balance.
One very important thing to note with an interest free credit card, and one thing that often catches people unawares is that even though you may have an interest free period of say 55 days, it s rare you will ever have the maximum 55 days to pay off your purchases. This is because the interest free period begins at the beginning of the billing period. So for example on day 1 of the billing and interest free period you buy something, and on the 30th day of the period you buy something else, BOTH purchases will have only 25 interest free days left.
In other words, the interest free period starts at the beginning of your billing period and not at the point you make each purchase. For that reason be sure to make a note of the beginning of each period so you know how long you have left at 0% interest.
Compare 55 Day Interest Free Credit Cards
Rates last updated October 28th, 2016.
- Commonwealth Bank Business Interest-Free Days Credit Card
First year annual fee waiver + new offer of $250 cashback. Offers will end 31 October 2016.
October 10th, 2016
- Citi Rewards Platinum Card - Cashback Offer
$250 cashback offer has been extended until 17 February 2017.
October 10th, 2016
- ANZ Low Rate Platinum Credit Card
A new offer of $250 Back and 0% p.a. for the first 6 months on purchases.
October 12th, 2016