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Interest free credit cards
An interest free credit card gives your bank account a break and could save you over $260 in one year on a $2,500 purchase.
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If you have some big expenses coming up or need to pay off debt you already owe, there are different types of credit cards that offer no interest for an introductory period on purchases, balance transfers or both. There are also cards that offer no interest on an ongoing basis and charge a monthly fee instead. Use this guide to compare your options and figure out how you can save.
Coles Credit Card - Exclusive Offer
Coles No Annual Fee Mastercard - Exclusive Offer
0% p.a. for 12 months on purchases and balance transfers
10,000 bonus Flybuys points
Offer ends 13 May 2021
Eligibility criteria, terms and conditions, fees and charges apply
Coles Credit Card - Exclusive Offer
Reward your spending with Flybuys points and save with 0% interest on balance transfers and purchases for the first 12 months.
- Ongoing $0 annual fee
- 0% on balance transfers and purchases for 12 months
- Collect 10,000 bonus Flybuys points when you make your first eligible spend within 30 days of approval
- Earn Flybuys point per $1 spent on eligible purchases
Compare interest-free credit cards
Use the calculator in the table below to see how much you could save with an interest-free offer on purchases based on how much you'll spend.
*The use of the terms "best" and "top" are not product ratings and are subject to our disclaimer. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
What's in this guide?
How do interest free credit cards work?
These cards charge 0% interest on purchases for an introductory period, usually from 3 - 17 months, beginning as soon as you're approved for the card. If you don't repay balance by the end of this period, any remaining debt will then be charged interest at the card's purchase rate.
Interest-free deals are usually promotional, so you'll need to apply by a specific offer end date to take advantage. You're still required to make minimum repayments each month (usually about 3% of your total balance) but it's wise to pay off as much as you can and pay off the entire account before interest applies.
How much money can I save with a 0% interest credit card?
Say you want to buy a new fridge that costs $2,000 and plan to put $200 a month towards paying it off. If you paid for it on a credit card with a 19% p.a. interest rate, it would take you 11 months to pay off the balance and cost you $194 in interest charges.
In comparison, if you had a credit card that offered 0% p.a. on purchases for 12 months, you could pay off the fridge over the course of 10 months and pay $0 in interest.
What types of credit cards offer 0% interest?
There are four types of cards that offer 0% interest: cards with interest-free promotions on purchases, on balance transfers, on both, or ongoing with monthly fees.
0% purchase credit cards
0% balance transfer credit cards
0% purchase and balance transfer credit cards
No interest, monthly fee credit cards
Pros and cons of interest free credit cards
Interest free credit cards can be a useful tool to help you save money when you buy now and pay later, as well as help you pay off existing debt and clear your balance faster. However, there are some potential downsides to these offers. Make sure you consider all the pros and cons.
Pros
- Save on interest costs. The obvious benefit of these cards is that you won't have to pay interest for the introductory period.
- Pay off debt faster. By not paying interest on your balance, you'll be able to pay it off a lot faster because the amount won't be creeping up every month.
- Complimentary extras. Some interest-free credit cards offer perks like travel insurance or rewards that could help you get more value out of the card.
Cons
- Revert rate. If you don't pay off your balance in full during the introductory period, this is the interest rate you'll pay on the remaining balance.
- Temptation to spend. Because you're putting off paying interest, it could be tempting to spend more than you can actually afford in the short-term.
- Credit score impact. If you already have a weak credit score, another enquiry could decrease it further and you may not be approved.
How to compare interest free credit card offers
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. Unless you've got a few specific short-term purchases in mind, the longer the introductory period, the better. This gives you more time to make interest free purchases and pay them back before the revert rate kicks in.
- Purchase interest rate. This is the rate you'll pay if you don't pay off your purchases before the introductory period expires, and also the rate you'll pay ongoing. This can be as high as 22% p.a., so make sure you factor this into your comparison.
- 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.
- Complimentary extras. Many cards offer extra perks such as complimentary international travel insurance, purchase protection, extended warranty coverage and concierge services. These perks add extra value to your card if you 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 the savings you'll get from the interest free offer offset the cost of the annual fee. You may even want to consider a credit card with no annual fee to help save even more.
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 may offer up to 55 days interest-free on purchases.
Usually, you can only take advantage of this interest-free period when you pay the balance that's listed on your credit card statement in full by the due date. How many interest-free days you'll get for each purchase also depends on when it's made in your statement cycle. You can see Finder's guide to interest-free days to learn more about how this works.
When will I be charged interest?
Even if you get a 0% interest rate offer for purchases or balance transfers (or both), there are times when you may be charged interest on your account. Here's a snapshot for both 0% purchase credit cards and 0% balance transfer cards.
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 go back to the standard purchase interest rate when the offer ends. For example, if the card offers 0% p.a. for 6 months, and reverts to 17.99% p.a., the interest-free period will end 6 months after your card was activated and any remaining balance from purchases will be collect the 17.99% p.a. interest rate.
- 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 will be charged interest at the cash advance rate from the time they are made.
- If you don't make minimum monthly repayments. Even with an interest-free period on your purchases, you'll have to pay at least the minimum amount required by the due date on each credit card statement (usually about 3% of your total balance).
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.
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.
Frequently asked questions
Do I have to make repayments during the interest-free period
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. The minimum amount will be listed on your statement and is usually around 2–3% of your account's closing balance, with a minimum dollar charge of around $20 – $30 (although sometimes these minimum amounts could be higher).
If you want to avoid ongoing debt and interest costs, you should pay more than the minimum amount whenever you can afford to do so. You can use Finder's credit card repayment calculator to help figure out how much to pay each month.
What happens if I don’t repay my balance on an interest-free credit card?
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:
- 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.
- Cancelled promotional interest rates. If you don’t make your minimum required payment, the interest-free promotion may be cancelled. 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.
What is the best interest-free credit card?
There is no one best interest-free credit card as the right one for you will depend on your financial position and what you plan to use it for. You can compare all the 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.
Credit 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.
Can I use a 0% purchase card when I'm overseas?
Typically, yes. As long as the promotional 0% interest rate applies, your overseas purchases won't 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.
What's the difference between 0% interest credit card offers and interest-free days?
A 0% purchase rate offer lasts for a limited amount of time from when you first get the new credit card. During this introductory period, you won't be charged interest on purchases as long as you pay the minimum amount listed on each statement.
In comparison, a credit card with interest-free days gives you a window of time in each statement period when you can make purchases without being charged interest. Usually, you need to pay the total amount owed on each statement to be eligible for interest-free days.
Do interest-free days apply during a 0% purchase promotion?
For the length of the 0% purchase promotion period, standard interest-free days aren't necessary. If your card comes with an interest-free days feature (say, for up to 55 days), then you'll be able to take advantage of this when the promotional period ends.
How many purchases will receive the 0% interest rate?
Once you've activated the credit card, all eligible purchases that you make will be 0% interest until the end of the promotional period. However, any purchases that haven't been repaid by the end of the introductory period will collect interest after that.
Will the credit card's annual fee be eligible for the 0% interest rate?
Credit card annual fees are usually not considered eligible purchases. So if you get a promotional 0% purchase rate credit card that also has an annual fee, you'll probably be charged interest on that part of your balance. You can contact the individual credit card providers to find out if this fee would be eligible for a particular interest-free promotion.
I'm planning to make a number of purchases over the next few months. How will the credit card 0% interest period work for these payments?
With this type of credit card, the promotional 0% interest rate is available for a fixed time period. For example, let's say you get a card offering no interest for 12 months on purchases from when you activate the card.
If you make a purchase on the day you get (and activate) your card, you will have 12 months to pay it off before any interest is charged. If you make another purchase after 3 months, you will have 9 months remaining for the 0% interest period, while if you make a purchase 11 months after getting the card, you'll only have 1 month interest-free for that purchase. After that, your 12-month 0% interest offer will end and the standard purchase rate will apply to new purchases.
How can I tell when the introductory 0% p.a. purchase rate period ends?
The quickest way to check when the introductory period ends is to look at your credit card statement or call your credit card provider and ask for the exact date that the 0% p.a. purchase rate period will end.
If you haven't applied for a 0% p.a. purchase rate card yet, you can check how long the introductory period is by looking at the advertised offer. For example, a card might give you 0% p.a. on purchases for 6 months, which means the introductory period would last for the first 6 months from when you get the card, or from the date you're approved for the card.
What is the interest rate after the introductory 0% purchase rate period ends?
After your 0% purchase promotion has finished, the outstanding balance will be charged interest at the card's regular purchase rate, usually known as the "revert rate". Make sure you check this interest rate before you apply. If you find yourself struggling to pay back what you owe, you can consider moving your outstanding debt to a 0% balance transfer credit card, which will give you more time to repay it interest-free.
Which credit card has the longest 0 interest period?
The cards on this page usually charge 0% interest on purchases for 3 to 15 months. You can sort the credit cards by "purchase rate" in the comparison table above to see which cards offer the longest interest-free period.
Can I pay my bills or government payments with no-interest cards?
While you could be able to use your card to pay for utilities and government payments, these transactions are sometimes listed as ineligible for the 0% introductory interest rate offer. Check the offer details or contact the credit card company directly to confirm what types of transactions are eligible.
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Ask an Expert
Hi,
I am needing an amount of $6800 and will be able to pay it back over a year. I will not be using the card for anything else but this one off overseas payment. What would be the best thing for me to do?
Hi Hayley,
Thanks for reaching out.
If you are looking for a credit card for overseas payment, you may want to consider reading our overseas transaction fees guide and find credit cards that may not charge foreign currency conversion fees.
You may also want to consider cards with 0% purchase interest rate. These cards allow you to save on interest payments during the promotional period in case you don’t intend to pay your balance in full at the end of the billing period.
Cheers,
Anndy
if i pay out the balance in the interest free period can i then cancel the card with no fees.
Hi David, thanks for your inquiry!
Yes this is generally accepted across balance transfer credit cards. Once you have repaid your outstanding balance you can cancel the credit card anytime.
Cheers,
Jonathan
Good morning, I read with interest the balance transfer credit cards with no interest for a period of time. I, like many people have that problem of having not paid my CC on the due date and now have a big balance. I currently have an ANZ Platinum CC, can I apply for a balance transfer with no interest?
Thank you
Hi Sharon,
Thanks for your inquiry.
Balance transfers can be a great way to repay an outstanding credit balance interest free. You may like to compare balance transfer offers and cards.Select ‘Go to Site’ to head over to their website to apply. Please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply to the card.
Cheers,
Jonathan
Hi, I’m looking for a credit card to allow me to pay bills between payments from work. Would use it very little only when my funds are a bit tight. Any recommendations? Suggestions
Hi Billy,
Thanks for your question.
If you are only planning on using your credit card sporadically, you may wish to consider low interest rate credit cards or no annual fee or a low income credit card.
Credit cards with high annual fees and rates usually come with extra features such as concierge services, complimentary insurance, and rewards programs. If you are after a credit card to use as a backup for your finances, some of these no frills options may be of interest.
You can select the “Go to Site” button of your preferred credit card to proceed with your application. You can also contact the provider if you have specific questions. A gentle reminder, please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply.
I hope this has helped.
Thanks,
Sally
hello,
im looking at having stomach surgery and I have most of the money but I am still needing about another $10,000 for this and I was wondering what credit card would be the best way for me to go as I would like to pay it off with in 12 months of having surgery.
thank you so much
Hi Sarah,
Thanks for your inquiry.
Depending on whether the surgery is billed as a purchase or cash advance (would be best to confirm with the medical company) this would determine whether an interest-free credit card would be ideal. You may refer to our page on comparing medical loans. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
I hope this has helped.
Cheers,
Jonathan
I have an existing credit card that I am trying to pay off. I am finding it hard as the interest I get charged each month is almost the same amount as my monthly repayments, which means I am getting no where. I have talked to some friends that have mentioned I should transfer my debt to an interest free credit card that way I can pay it off within the time of the interest free offer. Will this be beneficial for me? Is there any hidden charges I should be looking for? I am confident I can pay this off within 6-12months, as long as I don’t get charged interest.
Hi Angela,
Thanks for your question.
Your friends were likely referring to a balance transfer, which allows you to bring over an existing credit card balance to a new card and pay 0% p.a. interest on it for an extended amount of time. You can compare and apply for balance transfer credit cards as well as learn more about them. A few things to be aware of with balance transfer credit cards:
– Balance transfer rate: The rate you will be charged on the balance you bring over.
– Annual fee: Will you be charged an annual fee to use this product?
– Balance transfer revert rate: This is the rate you are charged after the balance transfer promotional period is over. Most of these cards revert to either the cash advance rate or purchase rate.
– Balance transfer period: How long you will receive the promotional balance transfer rate for.
– Balance transfer fee: Some cards may charge you a fee to bring over your credit card balance. This fee is often a percentage of the balance you bring over (eg. 3%)
This information can all be found in our credit card review pages, which can be found by clicking on ‘more info’ from the comparison table on the page I linked above. After you’ve reviewed your options and found the best card for your needs and situation, you can click ‘Go to Site’ to apply.
I hope this has helped.
Thanks,
Elizabeth
If you pay my card right out what interest rate will you charge me?
Hi Michael. Thanks for your question, but I’m not sure I understand. Are you referring to the balance transfer rate of interest? You can find this information in the comparison tables and in the review pages for each card. Jacob.