Want 0% interest on purchases, balance transfers, or foreign transactions? Compare your options and save with this guide.
If you're looking to cut down your interest costs and avoid racking up credit card debt, an interest-free credit card provides access to credit without the extra interest costs you'd usually have to pay. Whether you're looking to save on interest on balance transfers, purchases or foreign transaction fees, you can use this guide to compare the different types of 0% interest offers and to find the best* credit card for you.
Interest Free Credit Card Offer
The NAB Low Rate Card offers a low interest rate of 0% p.a. for 15 months on purchases and balance transfers.
- $59 p.a. annual fee
- 0% p.a. for 15 months (reverts to 13.99% p.a.) on purchases
- 0% p.a. for 15 months with a one off 3% balance transfer fee on balance transfers
- Cash Advance Rate of 21.74% p.a.
- Up to 55 days interest free
Compare interest-free credit cards
Rates last updated December 3rd, 2016.
- NAB Velocity Rewards Card
15k bonus points + 0% p.a. for 15 months on purchases and balance transfers valid until 22 Jan 2017.
October 3rd, 2016
- NAB Qantas Rewards Premium Card
Bonus points, purchase and balance transfer offer have been extended until 22 January 2017.
October 3rd, 2016
- ANZ Low Rate
A new offer of $100 Back and 0% p.a. for the first 6 months on purchases.
October 12th, 2016
0% purchase credit cards
This type of credit card allows you to make new purchases without paying interest during the introductory period. This period varies between cards, but is usually the first 3 to 15 months. After that, the standard interest rates for that card will apply to any remaining balance.
A 0% purchase credit card can be useful if you have a large expense coming up, such as an event, travelling overseas or the holiday season. Just make sure you check the standard interest rate and any other fees that may apply so you can budget for repayments when they are due.
When will I be charged interest on a 0% purchase credit card?
- When the interest-free period ends. So if the card comes with 0% for 6 months, the interest-free period will end 6 months after your card was activated.
- If you use your card for a transaction that isn’t considered a “purchase”, such as a cash advance or a cash equivalent transaction.
- If you don’t maintain your credit card payments each statement period.
Compare 0% purchase credit cards
0% balance transfer credit cards
A 0% balance transfer card offers an interest-free period on existing credit card debt that you move onto the new card. The 0% interest rate can last anywhere from 3 to 24 months depending on the offer.
After this time, the card’s standard interest rate will apply to the remaining balance. This could be as high as 22% p.a., so it’s important to pay off as much of the debt as possible during the interest-free period.
When will I be charged interest on a balance transfer credit card?
- If you make a purchase on the card, the purchase rate of interest will apply from the time the transaction is made.
- If you use your card for a cash advance or cash equivalent transaction.
- If the balance transfer interest-free period ends and you have an outstanding balance to pay.
Compare interest-free balance transfer credit cards
0% purchase and balance transfer credit cards
There are also some credit cards that offer 0% interest on both balance transfers and purchases, although the interest-free periods may be different lengths depending on whether you use the card for a balance transfer or 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. Again, you have to pay the card’s standard purchase or balance transfer interest rates if there is still a balance after the introductory period has ended.
Compare credit cards with both 0% on balance transfers and purchases
Credit cards with interest-free days
Many credit cards offer a certain number of interest-free days for each statement period. For instance, you may see “up to 55 days interest-free” included as a standard feature.
This 0% interest period is only available if you pay your balance off in full by the statement due date. If you carry a balance or make a late payment, you lose access to this feature and interest is applied for that statement period. You will only be able to access interest-free days again after you have paid your balance in full for at least one statement cycle.
When will I be charged interest on this card?
- If you don’t pay your balance back in full each statement period.
- If you use your card for a transaction that’s considered a cash advance or an ineligible purchase, unless otherwise specified.
Compare credit cards with 55 interest-free days
0% foreign transaction fee credit cards
Most credit cards apply foreign transaction and currency conversion fees to purchases made overseas or online with an international merchant. The fees are usually between 2% and 3.5% of the total transaction cost and are in addition to any interest charges that may apply for the balance – even if you are using a credit card with 0% interest on purchases.
Credit cards with 0% foreign transaction fees allow you to use your credit card for international transactions without paying these fees. This type of card is ideal if you’re planning a trip overseas or if you want to use a credit card to shop online.
Compare 0% foreign transaction fee credit cards
Similar to a credit card, a charge card gives you access to funds for a set amount of time and may include features such as rewards programs or complimentary insurance. But unlike credit cards, charge cards don’t apply an interest rate to the balance. Instead, you must pay off the total amount owing by each statement due date – and there are hefty fees and other penalties if you don’t.
While charge cards offer an interest-free way to make purchases with credit, they do not offer the same repayment flexibility as credit cards. They also have high income and credit rating requirements.
Compare business and corporate charge cards
How to compare interest-free credit cards
There are several card features you need to compare to find an option that suits your needs:
- Introductory period. Check how long the introductory period is available so you can factor this into your repayments and budget. Note that cards offering 0% interest on purchases and balance transfers may have different introductory periods for each option.
- 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 the rate when comparing options.
- Interest-free day requirements. Credit cards that offer up to a certain number of 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 for each statement cycle.
- 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 add 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, but only if you think you will use them.
- Annual fees. These can range from $20 to over $700. However, some cards do not incur an annual fee for the first year, or even for the life of the card. Make sure the benefits of the card outweigh the cost of the fee.
- Balance transfer fees. Some cards have a one-off processing fee of around 2% to 3% when you apply for a balance transfer. If you choose 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.
- Other fees. Be aware of fees such as cash advance charges, as well as late payment, overlimit and overseas transaction fees. Taking these into account when comparing cards will help you with your decision.
Interest-free credit cards can be a convenient and affordable way to access additional funds in a wide range of situations. But it’s important to compare your options to find the right type of card for your needs.
Frequently asked questions
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:
- 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.
Which interest-free credit card is right for me?
Interest-free cards provide 0% on purchases, 0% on balance transfers and 0% foreign transaction fees. Depending on your needs, your ideal credit card may feature one or more of these promotions and include other features and benefits. Compare your options and consider what you need and are eligible to apply for. It is important to consider the features and costs of the card to ensure that the benefits outweigh the costs.
How long is the interest-free period?
The interest-free period varies from card to card. In general, it can range from 6 to 24 months if you have a card with a promotional 0% balance transfer offer, or up to 62 days if it’s an interest-free days credit card. Make sure you read the terms and conditions of the card to ensure that the interest-free period complements your spending habits and financial situation.
Which credit cards can I balance transfer to?
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.
When does the interest-free period start?
Promotional interest-free periods begin when your credit card is approved and your balance transfer or new transactions are processed. Interest-free days begin on the first day of your statement cycle.
Can I transfer my outstanding balance after my promotion has ended?
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.
If I pay off my credit card balance during the interest-free period, can I cancel the credit card?
Yes, this is generally accepted across balance transfer credit cards. Once you have repaid your outstanding balance, you can cancel the credit card anytime.