Finder makes money from featured partners, but editorial opinions are our own.
How a credit card interest-free period works
Most credit cards in Australia offer interest-free days on purchases. Here's what you need to know to make use of them and save on credit card interest.
Interest-free days are a common credit card feature that gives you a way to make purchases without being charged interest for a set number of days in each statement period. They begin on the first day of your statement period and end on the payment due date.
For example, with a credit card that offers up to 55 days interest-free, you would get the maximum 55 days for purchases made on day 1 of your statement period. And a purchase made on day 30 would give you 25 days to pay it off before interest is charged.
Take note: Usually, you need to pay your credit card balance in full by the due date on your statement to make use of this interest-free period.
How do interest-free days work?
This visual example of interest-free days highlights the interest-free period (in green), when purchases are made, when the statement is issued and what happens if you pay less than the full amount for a billing cycle.
Example: How to use the interest-free period on a credit card
Say you had a credit card that offers up to 55 interest-free days, with a statement period that starts on the 1st of each month and ends on the 30th. If you were making purchases in June, here's how the time period would look:
1st June. First day of the statement.
30th June. Last day of the statement.
25th July. Payment due date for this statement period.
In this case, the 55 interest-free days begin on 1st June and end on the 25th of July. So, here's an example of how this credit card's interest-free period would work for your monthly purchases:
You make a $200 purchase on 1st June. You don’t have to pay any interest towards this purchase until 25th July, which gives you 55 interest-free days.
You make a $100 purchase on 20th June. This is the 20th day of your statement period, which means you get 35 days interest-free before a payment is due on 25th July.
You make a $150 purchase on 30th June. This is the last day of your statement period but the purchase won't attract any interest until 25th July, giving you an interest-free period of 25 days.
In this example, you would have a credit card balance of $450 from new purchases on your June statement. If you paid the total amount owed by the 25th July, you wouldn't be charged interest on your purchases. You'd also get interest-free days for the next statement period.
Statement period or billing cycle. The statement period shows activity on your credit card account and usually runs for 30 days, or from when your last statement was issued to when the next one is issued.
Payment due date. This date is listed on your statement and tells you when you need to pay at least the minimum amount. If you want to get interest-free days, you'll usually have to pay the total balance by the due date.
Closing balance or payment closing balance. The total you need to pay by the due date on your statement if you want to get interest-free days for the next statement period. A "closing balance" is usually the total of what's owed on your account, while a "payment closing balance" might be different if you have a promotional rate or offer for part of your balance.
Minimum monthly payments. This is the minimum you need to pay by the due date on your statement to avoid late fees and a late payment listing on your credit report. You usually can't get interest-free days for purchases if you only pay this amount.
Purchase rate. The interest rate charged on purchases. Interest-free days help you avoid this cost.
Take note: Interest-free days only apply to new purchases, including groceries and retail shopping, petrol, travel bookings and even medical appointments. Transactions that don't typically qualify for this interest-free period include cash advances, balance transfers and BPAY payments.
Is a credit card with interest-free days worth it?
Most credit cards in Australia offer interest-free days on purchases, so it may not be the main feature you look at when comparing cards. But if you pay off your credit card balance in full by the due date each month, a card with interest-free days means you can make purchases without paying interest. This could be ideal if you use a credit card to earn rewards or for short-term cash flow such as spending between monthly paydays.
You could also use it as an alternative to buy now pay later services. But if you think you might not be able to pay the account's closing balance in full each month, you may want to consider low interest rate credit cards and 0% purchase offer credit cards.
Finder survey: How long have Australians had their current interest-free credit card?
Response
5+ yrs
37.5%
2 yrs
27.94%
1 year
13.24%
3 yrs
13.24%
Less than 1 year
4.41%
4 yrs
3.68%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
Frequently asked questions
What is the maximum number of interest-free days I can get?
The humm90 Mastercard offers up to 110 days interest-free on all purchases (excludes cash advances). This is the highest number of interest-free days currently available on a credit card in Australia according to the Finder database.
In comparison, most other credit cards offer between 44 and 55 days interest-free, with a few also offering up to 62 days interest-free. These are also other cards that offer extended interest-free finance options with specific retail partners.
Do additional cards also get interest-free days?
Additional cards linked to your primary card follow the same billing cycle as the primary card and offer just as many interest-free days on purchases.
I can’t pay my account’s closing balance in full this month, but I can in the future. Will I ever get interest-free days again?
Usually, when you carry a balance over to your next statement period, you won't be eligible for interest-free days for that statement period. To get the interest-free period back, you'll need to pay the total amount listed on your next 1-2 statements by the due date. This does vary by card, so check the details for your account or ask your credit card provider what you need to do to get interest-free days again.
How do I get interest-free days?
You usually need to repay the full closing balance that's listed on your statement by the due date to get interest-free days. In most cases, you also need to pay the full balance for the previous statement, as well as the statement issued at the end of that period.
Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio
Amy's expertise
Amy has written 579 Finder guides across topics including:
If I do an EFT with my credit card do I benefit the up to 55 days interest free credit if I pay back the balance in full
Finder
ShirleySeptember 17, 2014Finder
Hi Stellah,
Thanks for your question.
Yes as long as you’re using the EFT for a purchase (not a cash advance) and pay your balance in full within the statement period, the interest free days apply.
Cheers,
Shirley
CamAugust 23, 2014
i am looking to buy a $4908.81 laptop for my University Course which requires a powerful Laptop, i was wondering what which 0% interest free on purchases credit card i should apply for i plan to pay it off over 9 – 12 month period.
i’m confused by the 55 day interest free period because i am only using it for this one purchase and plan to cancel the card straight after i’ve payed my purchase off. does this mean i have to pay my entire purchase off by 55 days or do i need to pay a certain amount per month?
Finder
ShirleyAugust 27, 2014Finder
Hi Cam,
Thanks for your question.
If you have a 0% Purchase Card, the 55 days interest free don’t apply until after your introductory period is over. For example, if you have a card that has 0% for 12 months, then during your first 12 months you don’t pay interest on that purchase (except for minimum repayments).
After that 12 months is over, then the 55 days interest free days apply, given that you don’t carry a balance from one statement period to the next.
Hope this helps,
Shirley
CamAugust 27, 2014
Thanks Shirley,
if i pay the item off well before the 12 months is up that would mean I wont pay for any interest correct?
i would be able to cancel the card right after paying off the item or do i have to keep the card for 12 months before cancelling the card?
My plan is to pay at least 1/4 of the laptop off the first payment then pay 100+ a week after than until i pay it off
Finder
ElizabethAugust 28, 2014Finder
Hi Cam,
That’s correct. If you make a purchase on a 0% purchase card and pay off your balance before the introductory period is over, you will not incur interest on the purchase you made with the card. You are also able to cancel the card after you finish paying off your remaining balance.
Thanks,
Elizabeth
Nesh001June 12, 2014
Hi,
according to above example,
card balance due date = 25th May
If I pay the balance in full by 20th May & if use the card again ($1000) on 23rd (before 25th card balance due date)
do I get interest free on $1000 till next card balance due date?
Thanks
Finder
ShirleyJune 16, 2014Finder
Hi Nesh001,
Thanks for your question.
Unfortunately you would only have two interest free days because the interest free period is up to 25th May.
If you would like to get maximum interest free days, you may want to consider making the purchase after the 25th. Please note that interest free days are voided if you hold a balance from one statement period to another, and during a balance transfer.
The video explains the concept in a more digestible manner.
Cheers,
Shirley
JasOctober 28, 2013
I am looking at getting a credit card to pay for surgery up $5000. I want to be sure I get the best possible card for this purpose. I would definitely be paying the monthly payment by the due date and I would be hoping to have the total paid off in a year. Can you suggest which card you think would be best?
Finder
JacobOctober 29, 2013Finder
Hi Jas,
Thanks for your question.
Please have the introductory purchase rate credit cards. These credit cards have a special interest rate on purchases made on the card for an introductory period. When you’re on this page, you can click the table headings to arrange the cards from lowest to highest interest rates, annual fees, etc., and vice versa. You can also use the checkboxes to the left of the table to compare cards one on one.
At the end of the introductory period, any unpaid purchases will be charged at the variable annual percentage rate for purchases. You will still be required to make the minimum repayment each month.
I hope this helps. And let us know if you have any further questions.
Cheers,
Jacob
KapilaOctober 19, 2013
Good One….Thanks for the details. How does the HSBC 51 day interest free plan works?
Finder
JacobOctober 21, 2013Finder
Hi Kapila,
Thanks for your question. HSBC offers up to 55 days interest-free with their credit cards. You can compare HSBC credit cards as well to see what each has to offer.
You can find out information about these credit cards by reading the card’s review.
I hope this helps.
Cheers,
Jacob
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
If I do an EFT with my credit card do I benefit the up to 55 days interest free credit if I pay back the balance in full
Hi Stellah,
Thanks for your question.
Yes as long as you’re using the EFT for a purchase (not a cash advance) and pay your balance in full within the statement period, the interest free days apply.
Cheers,
Shirley
i am looking to buy a $4908.81 laptop for my University Course which requires a powerful Laptop, i was wondering what which 0% interest free on purchases credit card i should apply for i plan to pay it off over 9 – 12 month period.
i’m confused by the 55 day interest free period because i am only using it for this one purchase and plan to cancel the card straight after i’ve payed my purchase off. does this mean i have to pay my entire purchase off by 55 days or do i need to pay a certain amount per month?
Hi Cam,
Thanks for your question.
If you have a 0% Purchase Card, the 55 days interest free don’t apply until after your introductory period is over. For example, if you have a card that has 0% for 12 months, then during your first 12 months you don’t pay interest on that purchase (except for minimum repayments).
After that 12 months is over, then the 55 days interest free days apply, given that you don’t carry a balance from one statement period to the next.
Hope this helps,
Shirley
Thanks Shirley,
if i pay the item off well before the 12 months is up that would mean I wont pay for any interest correct?
i would be able to cancel the card right after paying off the item or do i have to keep the card for 12 months before cancelling the card?
My plan is to pay at least 1/4 of the laptop off the first payment then pay 100+ a week after than until i pay it off
Hi Cam,
That’s correct. If you make a purchase on a 0% purchase card and pay off your balance before the introductory period is over, you will not incur interest on the purchase you made with the card. You are also able to cancel the card after you finish paying off your remaining balance.
Thanks,
Elizabeth
Hi,
according to above example,
card balance due date = 25th May
If I pay the balance in full by 20th May & if use the card again ($1000) on 23rd (before 25th card balance due date)
do I get interest free on $1000 till next card balance due date?
Thanks
Hi Nesh001,
Thanks for your question.
Unfortunately you would only have two interest free days because the interest free period is up to 25th May.
If you would like to get maximum interest free days, you may want to consider making the purchase after the 25th. Please note that interest free days are voided if you hold a balance from one statement period to another, and during a balance transfer.
The video explains the concept in a more digestible manner.
Cheers,
Shirley
I am looking at getting a credit card to pay for surgery up $5000. I want to be sure I get the best possible card for this purpose. I would definitely be paying the monthly payment by the due date and I would be hoping to have the total paid off in a year. Can you suggest which card you think would be best?
Hi Jas,
Thanks for your question.
Please have the introductory purchase rate credit cards. These credit cards have a special interest rate on purchases made on the card for an introductory period. When you’re on this page, you can click the table headings to arrange the cards from lowest to highest interest rates, annual fees, etc., and vice versa. You can also use the checkboxes to the left of the table to compare cards one on one.
At the end of the introductory period, any unpaid purchases will be charged at the variable annual percentage rate for purchases. You will still be required to make the minimum repayment each month.
I hope this helps. And let us know if you have any further questions.
Cheers,
Jacob
Good One….Thanks for the details. How does the HSBC 51 day interest free plan works?
Hi Kapila,
Thanks for your question. HSBC offers up to 55 days interest-free with their credit cards. You can compare HSBC credit cards as well to see what each has to offer.
You can find out information about these credit cards by reading the card’s review.
I hope this helps.
Cheers,
Jacob