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Your credit card’s interest-free period, explained

Interest-free days are the closest you’ll get to free money with a credit card: Here’s how they work.

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Most credit cards offer you interest-free days for new purchases, giving you a way to borrow money for "up to" a set number of days without paying interest. To take advantage of the interest-free period, you usually have to pay your credit card balance in full by the due date on your statement.

But credit card companies profit from interest, so why would they offer this feature? Read on to find out what interest-free days are, how they're calculated and what you need to know to make the most of them and save yourself some money.

What does "interest-free days" mean?

Interest-free days give you a period of time when you can make purchases without being charged interest during your credit card billing cycle. Interest-free days begin on the first day of your statement period and end on the payment due date. For example, if you made a purchase on day 1 of a statement period, you could have 55 days to pay it off before interest is applied to the balance. A purchase made on the second day of that statement period would give you 54 days interest-free, and a purchase made on day 30 would give you 25 days to pay it off before interest is charged.

Other key definitions you need to know

When you're learning about interest-free days, you'll often come across a number of other terms that relate to this feature. Here are three major ones to take note of:
  • Statement period/billing cycle. The statement period usually runs for 30 days, or from when your last statement was issued to when the next one is issued. With interest-free days, this is the time when you can make purchases and avoid interest.
  • Statement issue date. This is the date on which the bank issues your monthly credit card statement.
  • Payment due date. The date by which you must pay the balance to avoid late charges/fees. If you want to get interest-free days, you'll usually have to pay your full balance by this date.
  • Purchase rate. The interest rate charged on purchases. Interest-free days help you avoid this cost.

Answers to the most common questions about interest-free days

How do I receive interest-free days?

To be eligible to receive interest-free days, you must repay your account's outstanding balance in full by the due date on your statement. Usually, you'll need to pay the full balance for the statement that you got before the start of that billing cycle, as well as the statement issued at the end of it.

Why does it always say "up to 55 days"?

The amount of interest-free days available varies depending on what day of your billing cycle you make the purchase. While you would get 55 days interest-free on purchases made on the first day of the billing cycle, you'd get 54 on the second day and only 1 day interest-free if you made a purchase the day before your statement was issued for that billing period. So "up to" is used to refer to the maximum amount of days you can get interest-free in your billing period.

Can I make interest-free purchases with a balance transfer credit card?

If you want to pay off existing debt with a 0% balance transfer offer, be aware that it could affect the interest-free period for new purchases. Some credit cards only offer interest-free days for purchases when you pay the account's entire closing balance, including any balance transfer debt. Others let you make interest-free purchases when you have a balance transfer, as long as you pay the entire purchase balance for your statement – and may even list that balance on your statement. For example, NAB has an "interest-free days payment" amount that you can pay to still get interest-free days while you carry a balance transfer debt, while Westpac has a "Monthly Payment Balance" that shows the amount you need to pay to get interest-free days on purchases.

Is a credit card with interest-free days suitable for me?

If you pay off your credit card balance in full by the due date each month, a card with interest-free days will allow you to 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 other 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 like to consider low interest rate credit cards and 0% purchase offer credit cards.

Compare 55 days interest-free credit cards

Data updated regularly
Name Product Purchase rate Interest-free period Annual fee Balance transfer rate
HSBC Platinum Credit Card
19.99% p.a.
Up to 55 days on purchases
$29 annual fee for the first year ($129 p.a. thereafter)
0% p.a. for 36 months
Save money with a 0% balance transfer rate for 36 months (with no BT fee), a first-year annual fee discount and free travel insurance.
Westpac Low Rate Card
13.74% p.a.
Up to 55 days on purchases
$0 annual fee for the first year ($59 p.a. thereafter)
0% p.a. for 28 months with 1% balance transfer fee
Save with a $0 annual fee for the first year, plus, a 0% interest rate on balance transfers for 28 months.
Citi Rewards Card - Balance Transfer Offer
21.49% p.a.
Up to 55 days on purchases
$49 annual fee for the first year ($149 p.a. thereafter)
0% p.a. for 30 months
Save on interest with 0% p.a. on balance transfers for 30 months with no balance transfer fee. Plus, a $49 first-year annual fee.
Bankwest Breeze Classic Mastercard
10.99% p.a.
Up to 55 days on purchases
$0 annual fee for the first year ($49 p.a. thereafter)
0% p.a. for 26 months with 2% balance transfer fee
Save with 0% p.a. on balance transfers for 26 months (with a 2% BT fee) and $0 first-year annual fee. Plus, a 10.99% p.a. purchase interest rate.
Qantas Premier Platinum
19.99% p.a.
Up to 55 days on purchases
$199 annual fee for the first year ($299 p.a. thereafter)
0% p.a. for 18 months with 1% balance transfer fee
Get 100,000 bonus Qantas Points when you spend at least $4,000 within the first 3 months. Plus a discounted $199 first-year annual fee.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
20.74% p.a.
Up to 55 days on purchases
$64 annual fee for the first year ($129 p.a. thereafter)
0% p.a. for 26 months
Get 0% p.a. for 26 months on balance transfers and a reduced first-year annual fee. Plus, $129 Virgin Australia Gift Voucher per year.
Bendigo Bank Low Rate Credit Card
11.99% p.a.
Up to 55 days on purchases
$45
0% p.a. for 24 months with 2% balance transfer fee
Save with 0% p.a. on balance transfers for 24 months (with a 2% BT fee). Plus a 11.99% p.a. purchase interest rate.
Coles Low Rate Mastercard
12.99% p.a.
Up to 55 days on purchases
$58
0% p.a. for 15 months
Enjoy a 0% interest on balance transfers for 15 months, with no BT fee. Plus, earn Flybuys points as you spend.
Citi Clear Card
14.99% p.a.
Up to 55 days on purchases
$49 annual fee for the first year ($99 p.a. thereafter)
0% p.a. for 15 months
Get $250 cashback when you spend $3,000 within the first 90 days. Plus, a 0% balance transfer offer and first-year annual fee discount.
Kogan Money Black Card - Exclusive Offer
20.99% p.a.
Up to 55 days on purchases
$0
0% p.a. for 24 months
Finder Exclusive
Save with a $0 annual fee and a 0% introductory rate on balance transfers. Plus, earn $50 Kogan.com Credit and uncapped rewards points.
Citi Simplicity Card
0% p.a. for 6 months, reverts to 21.49% p.a.
Up to 55 days on purchases
$0
0% p.a. for 6 months
Get 0% p.a. interest for up to 6 months on purchases and balance transfers. Plus, a $0 annual fee for life.
Latitude Gem Visa
24.99% p.a.
Up to 55 days on purchases
$99
Enjoy 0% p.a. interest on purchases over $250 for 6 months, optional shopper's protection insurance and the convenience of Samsung Pay.
St.George Vertigo Classic
13.99% p.a.
Up to 55 days on purchases
$55
0% p.a. for 28 months
Enjoy a 0% interest rate on balance transfers for 28 months, with no balance transfer fee.
American Express Platinum Edge Credit Card
20.74% p.a.
Up to 55 days on purchases
$195
Get $200 travel credit per year to spend on eligible flights, accommodation, car hire and more. Plus, earn up to 3 points per $1 on eligible spending.

Citi Rewards Card - Velocity Points Offer
21.49% p.a.
Up to 55 days on purchases
$99 annual fee for the first year ($199 p.a. thereafter)
0% p.a. for 15 months
Enjoy 100,000 bonus Velocity Points when you spend $3,000 in the first 90 days. Plus, complimentary travel and purchase insurance.
humm90 Mastercard
23.99% p.a.
Up to 110 days on purchases
$99
Enjoy up to 110 days interest-free on purchases, 0% foreign transaction fees and flexible instalment plan options.
ANZ Low Rate
12.49% p.a.
Up to 55 days on purchases
$0 annual fee for the first year ($58 p.a. thereafter)
0% p.a. for 20 months
Save with 0% p.a. on balance transfers for 20 months (with no BT fee) and $0 first-year annual fee. Plus a 12.49% p.a. purchase interest rate.
Bank of Melbourne Vertigo Classic
13.99% p.a.
Up to 55 days on purchases
$55
0% p.a. for 28 months
Save with a 0% interest on balance transfers for 28 months, with no balance transfer fee.
St.George Amplify Platinum
19.74% p.a.
Up to 55 days on purchases
$99
0% p.a. for 15 months with 1% balance transfer fee
Receive 80,000 bonus Amplify Points (worth $350 in eGift cards) when you spend $3,000 in the first 90 days. Plus, a 0% balance transfer offer.
American Express Velocity Escape Card
20.74% p.a.
Up to 55 days on purchases
$0
Earn 0.75 Velocity Points on your everyday purchases, uncapped, and pay $0 annual fee for the life of the card with this no-frills frequent flyer card.
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What else do I need to know when using a credit card with interest-free days?

You can use a credit card with interest-free days to save on your account costs when you meet specific requirements. Here are the key details to keep in mind so you can make use of your interest-free days:

  • Minimum monthly payments. You usually can't get interest-free days for purchases if you only pay the minimum amount required on your statement, as most credit cards only offer this benefit when you pay your balance in full by the due date.
  • Eligible purchases. Interest-free days are only available for "eligible purchases" made on your card. While this usually includes everyday spending at the supermarket, petrol station, restaurants and so on, exclusions typically apply for cash advance transactions, government payments and some bill payments. Check with your credit card provider for details on what is considered an "eligible purchase" for your card.
  • Dates vary. Don’t expect all your credit cards to come with similar billing cycle dates and dues dates. These dates can vary from one card to the next, even when issued by the same card issuer.
  • Instalment plans. If you set up an instalment plan for part of your credit card balance, you will usually have to pay the required instalment repayment, as well as the rest of your monthly account balance, to remain eligible for interest-free days. These details will usually be shown on your credit card statement, as well as your provider's website. If you're unsure, contact your provider to check whether you can still get interest-free days when you have an instalment plan.

Compare credit cards with 0% interest on purchases and balance transfers

Example: Making use of interest-free days

Let’s assume you have a credit card that offers 55 interest-free days and its billing cycle begins on the 1st of each month and ends on the 30th. Given the 55 interest-free days, the due date on your credit card statement would be the 25th of next month. So if you were making purchases in June, here's how it would look:

  • 1st June. First day of the statement
  • 30th June. Last day of the statement
  • 25th July. Due date of your payment for June

In this case, the 55 interest-free days begin on 1st June and end on the 25th of July when your payment is due. So here's how your interest-free period would work as you make purchases throughout the month:

  • 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 billing cycle, so you don’t have to pay any interest towards the purchase until 25th July. This means you get 35 interest-free days.
  • You make a $150 purchase on 30th June. This is the last day of your billing cycle but the purchase won't attract any interest until 25th July, giving you an interest-free period of 25 days.

When you're statement is issued for June, you'll owe $450. So as long as you pay this in full by the 25th July, you won't be charged interest on your purchases and can continue to enjoy interest-free days for the next billing cycle.

Diagram: How do interest-free days work?

Interest-free days can be tricky to visualise, so you can see this handy diagram to understand how it works. As well as showing the interest-free period (in green), we also show when purchases are made, when the statement is issued and what happens if you pay less than the full amount for a billing cycle (the middle one in this case).

interest free days cc diagram


Credit cards that come with 55 interest-free days give you the ability to make purchases and not pay any interest towards them as long as you make timely repayments. Such cards can come with a number of other features as well, so it’s important that you choose a card as per your requirement. Bear in mind that just about every credit card issuer provides cards with interest-free days on purchases, so it is in your most interest to compare as many as possible before making a decision.

More questions about credit card interest-free periods

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32 Responses

    Default Gravatar
    NicoleJanuary 25, 2016

    Is paying telstra, synergy, Alinta gas , western power also a cash advance or can I use my credit card

      Avatarfinder Customer Care
      DebbieJanuary 27, 2016Staff

      Hi Nicole,

      Thanks for your inquiry.

      If these falls under bill payments then typically they may be considered as cash advances. I suggest that you speak to your credit card provider directly to confirm whether the payments for the mentioned services or utility providers are considered as cash advances. You can also revisit your cardholder agreement with your credit card provider to learn more about their terms.

      To know more which credit card transactions fall on cash advances, kindly refer to our guide on cash advances.

      I hope this helps.

      Cheers,
      Debbie

    Default Gravatar
    HayleyNovember 18, 2015

    Hi,
    If my statement closes on say the 30th October and I owe $100 on my credit card which is due 15th November, if I pay the $100 off on the 10th November and then proceed to spend another $50 on my credit card that same day, is my balance considered cleared on the 15th November and that $50 goes to next months billing cycle or will I be charged interest on that new $50 now?

      Avatarfinder Customer Care
      JonathanNovember 20, 2015Staff

      Hi Hayley, thanks for your inquiry!

      To allow us to assist you further could you provide us with a specific bank please?

      Cheers,

      Jonathan

      Default Gravatar
      HayleyNovember 20, 2015

      Hi Jonathan,

      ANZ – Platinum rewards

      Avatarfinder Customer Care
      JonathanNovember 22, 2015Staff

      Hi Hayley, thanks for your response.

      Even if you had cleared your $100 outstanding balance, your entire balance (including the $50) would have to be cleared before your payment due date in order to receive interest-free days on your purchases.

      I hope this helps.

      Cheers,

      Jonathan

    Default Gravatar
    BenApril 7, 2015

    Hi

    Iv just got a mortgage and want to utilize a credit card with my monthly day to day spending so I can pay my weekly income straight off the mortgage. I then want to redraw from my mortgage to pay off my credit card each month.

    Can I get a card which will allow me to make both purchases and cash withdrawals which will be interest free over a 1 month period?

      Avatarfinder Customer Care
      JonathanApril 8, 2015Staff

      Hi Ben,

      Thanks for your inquiry.

      Please refer to the following link for a list of 0% purchase cards. As of this time, there are no interest-free rates on cash advances, although there are low rate cash advance cards available.

      You can press 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.

      Cheers,
      Jonathan

    Default Gravatar
    MariaSeptember 30, 2014

    My question is:
    If I paid in full one period, it supposes I am not going to be charged with interest for that period (which is reflected in my next statement). My bank charged me interest anyway the next period. I asked the bank and they replied that only if I pay in full every period I am not getting charged with interest.
    Is that correct?
    Thanks…
    Maria

      Avatarfinder Customer Care
      ElizabethOctober 1, 2014Staff

      Hi Maria,

      Thanks for your question.

      This is correct. Only by paying your balance in full each month are you able to avoid interest on purchases each statement period.

      Hope this has helped.

      Thanks,

      Elizabeth

    Default Gravatar
    StellahSeptember 16, 2014

    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

      Avatarfinder Customer Care
      ShirleySeptember 17, 2014Staff

      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

    Default Gravatar
    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?

      Avatarfinder Customer Care
      ShirleyAugust 27, 2014Staff

      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

      Default Gravatar
      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

      Avatarfinder Customer Care
      ElizabethAugust 28, 2014Staff

      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

    Default Gravatar
    NishanthaJune 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

      Avatarfinder Customer Care
      ShirleyJune 16, 2014Staff

      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

    Default Gravatar
    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?

      Avatarfinder Customer Care
      JacobOctober 29, 2013Staff

      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

    Default Gravatar
    KapilaOctober 19, 2013

    Good One….Thanks for the details. How does the HSBC 51 day interest free plan works?

      Avatarfinder Customer Care
      JacobOctober 21, 2013Staff

      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

    Default Gravatar
    JohnJune 18, 2012

    For those that are confused, Yes any purchases in May (Say the 1st of May) would be part of the next statement, and would have 55 interest free days until 25 June… BUT ONLY IF YOU PAID YOUR BALANCE IN FULL FIRST. If you paid the card off to $0.00 on 1 May then your purchase would be interest free until 25 June, if your balance was still outstanding, then even a purchase on 24 May would only have 1 day interest free.

    So basically to reset your interest only days and not pay interest:
    Pay off the balance of the card before the due date
    AND
    1.Pay it off on the 1st day (in the example 1 May) of the statement will give you 55 days interest free (in the example up to 25 June)
    OR
    2. Pay it off on the due date(in the example 25 May) will give you 30 days interest free for purchases before the statement start date (in the example 1 June)
    OR
    3. If you pay it off on the due date (in the example 25 May) do not use it until the start of the next statement period (in the example 1 June) The you would not have to pay it off until the following months due date (25 July).

    Your interest only days ONLY reset after the balance has reached $0.00 so if you had $450 of costs in April, PAID OFF $350 1 May, then SPENT $200 on 24 May, and PAID OFF the $100 left over from the $450 on 25 May, on 26 May you would immediately start paying interest on the outstanding $200 because you never reduced the balance to $0.00.

    My suggestion is to have 2 cards, preferably ones that don’t have an annual fee, then simply alternate the cards each month so you can have the full interest free days.

    Eg:
    Jan:Use card 1
    Feb: Use Card 2, Pay off Card 1
    Mar: Use Card 1, Pay off Card 2
    Apr: Use Card 2, Pay off Card 1
    May: Use Card 1, Pay off Card 2
    Jun: Use Card 2, Pay off Card 1
    etc…

    As long as you can pay off the cards, you don’t have a problem, however if having 2 cards just means you will spend more, I would advise against it.

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