Ask Finder: Are there balance transfer credit cards that offer interest-free days on purchases?

Most credit cards do not offer interest-free days on purchases when you have a balance transfer, but there are some exceptions.

You've hit on a really important question for anyone dealing with debt and the possibility of more credit card spending. As you've found, usually new purchases on a balance transfer card will be charged interest from the date you make them.

But there is a small selection of issuers that buck this trend – including Bankwest and Bendigo Bank, as we have outlined below.

1. Bankwest credit cards: Offer interest-free days on new purchases when you have a balance transfer debt – as long as you pay the rest of your closing balance in full by the due date each month. This means if you had a balance transfer of $3,000 on the card and had made $500 of new purchases, you'd need to pay off the entire $500 of new purchases to be eligible for interest-free days in the next statement period.
2. Bendigo Bank credit cards: Give you up to 55 days interest-free on new purchases for each statement period, even if you carry a balance transfer debt. In addition to offering interest-free days while you carry a balance transfer, Bendigo charges interest from the statement date – meaning you're only charged interest on the total outstanding amount, not each individual purchase. As an example, if you made 5 purchases totalling $200 on your credit card and pay $150 by the statement due date, you'll start to collect interest on the remaining $50.

If you know you'll be spending a lot over a short period of time while you have a balance transfer, another option you could look at is a card that offers introductory 0% interest rates for both balance transfers and purchases. This would give you a set amount of time to pay off existing debt interest-free, while also offering you interest-free spending when you first get the card.

Just remember that the card's standard purchase rate will apply after the introductory period, which could last anywhere from 3 to 13 months.

Another potential alternative is to get a card that lets you pay off your purchases with a structured instalment plan. Sometimes, these plans offer a 0% interest rate, or at least a reduced rate of interest for the purchases. But it does vary between cards and plans, so you'll need to carefully read through the offer details before requesting an instalment plan for purchases if you choose this option.

Likewise, when you're comparing balance transfer cards, make sure you look beyond the interest-free options and consider the standard interest rates, annual fee and any other features you want. This will help make sure you know exactly what you're getting with the card you choose.

Lastly, while there may be times when it's unavoidable to make purchases with your credit card, try your best not to rack up new debt when you're paying off a balance transfer.

Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at the time of publication and we only give general advice.

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