Cards with 0% interest on purchases and balance transfers can help you cut card costs and avoid collecting debt. The interest-free offer will only last for an introductory period and any unpaid balances will attract a higher revert rate. Most cards also offer interest-free days on purchases when you pay your balance in full, but there are some conditions involved.
You can use this guide to compare credit cards that don't charge interest, learn how they work and the factors you should consider before applying.
Bendigo Bank Credit Card Offer
Bendigo Bank Low Rate Mastercard
0% p.a. for the first 15 months on purchases
Offer ends 02 August 2020
Eligibility criteria, terms and conditions, fees and charges apply
Bendigo Bank Credit Card Offer
Save with an interest-free introductory offer on purchases. Plus, a competitive annual fee and ongoing balance transfer rate.
0% p.a. interest rate on purchases for the first 15 months, reverts to 11.99% p.a.
Balance transfer rate of 11.99% p.a. | Cash advance rate of 13.99% p.a.
Annual fee of $45 for primary cardholders and $0 for additional cardholders
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Best* interest-free credit cards trending now
Compare the features of these interest-free credit cards to see if one is right for you.
Bank of Melbourne Vertigo Platinum. Get interest for up to months on purchases with this rewards card that also boasts complimentary travel and purchase insurance covers.
Citi Platinum Card - Exclusive Offer. This credit card offers 0% interest on balance transfers for the first 26 months (with a 1.5% balance transfer fee) and $0 first year annual fee when you apply through Finder.
HSBC Platinum Card. Earn HSBC Rewards Points for your spending and pay 0% interest for the first 22 months on balance transfers.
How do interest-free credit cards work?
These cards charge no interest on purchases or balance transfers for an introductory period. The 0% interest period usually begins as soon as the card is approved and will last for a set number of months. If you're unable to repay balance by the end of the introductory period, any remaining debt will attract the relevant revert interest rate.
Interest-free deals are usually promotional, so you may need to apply by a specific offer end date to take advantage of the low interest rate. You're still required to make minimum repayments each month during the promotional period but it's wise to pay off as much as you can and pay off the account before interest applies.
What types of credit cards offer 0% interest?
There are two types of cards that offer 0% interest: cards with interest-free promotions for purchases or 0% on balance transfers. Read on to understand how these two card types work and how you could use one to reduce your interest costs.
0% purchase credit cards
These cards charge no interest to new purchases for a promotional period. Depending on the card, the interest-free period can range from 3 months to 15 months. Most credit cards charge purchase rates between 8.99% p.a. and around 21% p.a., so these interest-free offers could help you save and avoid collecting debt.
This type of card could be useful if you have some big purchases to make (such as buying furniture, booking a holiday or organising Christmas gifts) and you want more time to pay it off without being charged interest.
When will I be charged interest on a 0% purchase credit card?
If you still carry a balance at the end of the introductory period.The 0% p.a. offer only applies for an introductory period and will revert to the standard purchase interest rate when the offer ends. For example, if the card comes with 0% p.a. for 6 months, the interest-free period will end 6 months after your card was activated and any remaining balance from purchases will collect interest.
When you use your card for a transaction that isn’t considered a “purchase”.While most everyday spending will be eligible for the interest-free offer, transactions such as cash advances or cash equivalent transactions will be charged interest at the cash advance rate from the time they are made.
If you don’t make minimum monthly payments. Even with 0% p.a. interest on your purchases, you'll have to pay at least the minimum amount required by the due date on each credit card statement.
0% balance transfer credit cards
If you have existing credit card debt, you can move it to a new card with 0% on balance transfers for a promotional period to pay it off with no interest. These interest-free offers can range from 6 months to 24 months.
You can also consolidate multiple debts onto one card and pay them off under one account with no interest with a balance transfer. These cards sometimes charge annual fees and a one-time balance transfer fee (of around 2% or 3%) will apply when you first move the debt.
When will I be charged interest on a 0% balance transfer credit card?
If you make new purchases. When you make a purchase on this type of card, the interest rate for purchases will apply. Even if you pay off the purchase in full by the statement due date, you won't be eligible for interest-free days on purchases with most cards while you're paying off a balance transfer.
If you use your card for a cash advance or cash equivalent transaction. If you use your card for an ATM withdrawal, gambling or another cash advance transaction, you'll immediately attract the cash advance interest rate.
If you don't pay off your balance transfer debt by the end of the introductory period. If the introductory 0% period ends and you have an outstanding balance to pay, any remaining balance transfer debt will attract the revert rate. This is usually the cash advance interest rate.
0% purchase and balance transfer credit cards
If you have existing credit card debt, you can move it to a new card with 0% on balance transfers for a promotional period to pay it off with no interest. These interest-free offers can range from 6 months to 24 months.
If you have multiple credit card debts, you can consolidate them onto one card and pay them off under one account with no interest with a balance transfer. These cards sometimes charge annual fees and a one-time balance transfer fee (of around 2% or 3%) will apply when you first move the debt.
This type of credit card offers an introductory 0% interest rate for both balance transfers and purchases. However, the promotional interest-free periods may be different lengths for balance transfers and purchases. For example, a card could offer 0% interest on balance transfers for up to 15 months but only 0% interest on purchases for the first 3 months.
When the introductory period ends, any remaining debt from purchases or balance transfers will attract interest at the standard variable rate for that card. This rate could also be different for purchases and balance transfers.
Are there cards that charge no interest to both purchases and balance transfers?
Yes, there are some cards that offer 0% on both balance transfers and purchases. Depending on the card, the length of the interest-free offers may differ between purchases and balance transfers. You can learn more and compare these cards in our guide to credit cards with 0% on purchases and balance transfers.
What about credit cards with interest-free days?
Many credit cards offer a certain number of interest-free days for each statement period. For example, your card offer up to 44 or 55 interest-free days on purchases.
You can usually only take advantage of interest-free days when you pay your balance off in full by the due date listed on your card statement. How many interest-free days you'll access will depend on when the purchase was made in your statement cycle. You can see Finder's guide to interest-free days to learn more about how this feature works.
How to compare interest-free credit card offers in Australia
If you want to get a credit card with an interest-free period, consider the following features and details to find one that's right for you:
Introductory period. If the card offers a promotional 0% interest rate for purchases or balance transfers, check how long the introductory period is available for so you can factor this into your repayments and budget. Consider your budget and calculate whether or not you can repay the balance you put on the card while the introductory offer is in place. If not, you might want to look for a card with a longer promotional interest-free period.
Standard interest rates. The standard variable purchase and balance transfer rates for credit cards can be as high as 22% p.a. Make sure you check what the promotional rate reverts to when comparing options so that you can budget for any interest charges that may apply if you're still carrying a balance at that time.
Interest-free days requirements. Credit cards that offer interest-free days for each statement cycle usually have specific conditions around eligible purchases and repayments. For example, cash advances are not eligible for interest-free days and you must pay your balance in full by the due date on each statement.
Rewards programs. Some cards earn rewards or frequent flyer points for every $1 spent on the card. These programs can provide extra value, particularly if you have an interest-free credit card for purchases. But be careful you don't overspend in order to get more rewards, otherwise you may end up with unnecessary debt.
Complimentary extras. Many cards offer complimentary extras such as international travel insurance, purchase protection, extended warranty coverage and concierge services. These perks may add value to your card, but only if you think you will use them.
Annual fees. While some cards charge $0 annual fees, others charge fees that can range from $20 to over $700 each year. Make sure that the cost of the annual fee doesn't offset the interest savings you'll make from the interest-free offer. You may even want to consider a credit card with no annual fee to help save on your costs.oose an interest-free card for your existing debt, make sure you look for this fee when comparing options so you can find one that’s affordable.
Whether you're making new purchases or paying off an existing debt, a card with an interest-free offer can help you save on interest and get your credit card under control. As there are many competitive 0% promotions in the market, it's important to compare your options to find the right type of card for your needs.
Pictures: Shutterstock
Frequently asked questions
Yes, regardless of the type of interest-free credit card you choose, you will still need to pay at least the minimum amount required by the due date on your statement.
Regardless of the type of interest-free credit card you choose, you still need to make repayments by the statement due date each month. If you fail to maintain these regular repayments, some of the repercussions you could face include:
Interest charges. If you don’t pay your balance in full by the statement due date, interest will be applied to the remaining debt.
Late payment fees. If you don’t make a payment by the statement due date, a late payment fee may be applied. This can be $10 to $30 on a standard credit card, or more on a charge card.
Overlimit fees. A fee of between $10 and $30 can apply if you don’t repay your credit card balance and go over your available credit limit.
Cancelled promotional interest rates. If you don’t pay the balance, the interest-free promotion may no longer apply. This penalty varies depending on the card, so make sure you check the terms of your offer.
Bad credit. Failing to make repayments could have a negative impact on your credit history – especially if your account goes into default.
If you’re struggling to make a repayment by the due date on your statement, it’s important to contact your credit card provider as soon as possible. Customer service staff will assess your situation and discuss repayment options based on your individual circumstances.
There is no one best interest-free credit card as the right one for you will depend on your financial needs. You can compare a range of features including the type of 0% offer, how long the interest-free period lasts for, the revert rates that apply after the offer ends as well as any other fees or features that apply.
Some cards also have eligibility criteria (such as credit history and minimum income requirements), so make sure that you check if you meet these before applying.
The interest-free period doesn't last forever. Unless you can pay off your balance in full each month, interest will apply eventually. As long as you pay off your credit card before the interest-free period ends, this won't be an issue.
Some cards with 0% on purchases or balance transfers also charge annual fees, which is important to consider when you're calculating the value of the card.
You can usually balance transfer to any bank and credit card, excluding banks you currently have a credit card with. See this guide for a complete list of banks that don’t allow balance transfers between each other.
Promotional 0% periods begin when your credit card is approved. Interest-free days begin on the first day of your statement cycle.
Yes. Transferring your existing balance after a 0% purchase or 0% balance transfer promotion has ended is allowed. Note that any balance transfer request will be subject to lending criteria and approval from the issuer.
Yes, this is generally accepted across balance transfer credit cards. Once you have repaid your outstanding balance, you can cancel the credit card any time.
Typically, yes. As long as the promotional 0% interest rate applies, your overseas purchases should not attract any interest. You may be charged a foreign transaction fee when you make a transaction in an international currency, though. Any transactions that don't count as purchases (such as withdrawing cash from an ATM or buying foreign currency) will be charged interest at the cash advance rate for your card. Make sure to check the Product Disclosure Statement for your individual card for the specific details.
Sally McMullen is a creative content producer at Finder, co-hosts our Pocket Money podcast and wrote about credit cards for almost five years. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone. She has a Bachelor of Communication and Media Studies majoring in Journalism (Hons) from the University of Wollongong.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
* The credit card offers compared on this page are chosen from a range of credit
cards finder.com.au has access to track details from and is not representative
of all the products available in the market. Products are displayed in no particular
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You should consider seeking independent financial advice and consider your own
personal financial circumstances when comparing cards.
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