What does 55 days interest-free really mean?

Information verified correct on December 10th, 2016

How does an interest-free credit card work?

Interest-free days can be a confusing feature, with the exact interest-free period generally undisclosed by banks. In this guide we will break down and simplify how to receive interest-free days.

Credit card interest-free days provide you with a period of purchasing with zero interest.

Explanation of terms before we go further into explaining this credit card feature:

  • Statement issue date/ billing cycle. The date which the bank will issue your monthly credit card statement to your email/ address.
  • Payment due date. The date which you must pay the balance by to avoid late charges/ fees.
  • Purchase rate. The interest rate charged on purchases.

Answers to the most common questions about interest-free days

How do I receive interest-free days? 

To receive interest-free days you must repay your account's outstanding balance in full in the previous month.

What does 55 interest-free days mean?

The ideal way to illustrate this is through an example. 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:

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

These 55 interest-free days begin from the first day of the statement, that is, 1st June, and end on the due date, that is 25th July.

Does this mean I will get 55 interest-free days for every purchase I make?

Unfortunately, the answer to this is no, and taking the previous example a little further can help illustrate the same:

  • 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, and you don’t have to pay any interest towards it until 25th July. In this instance, you get 35 interest-free days.
  • You make a $150 purchase on 30th June, and this purchase does not attract any interest until 25th July. Here, you get 25 interest-free days.

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

You can make a purchase at just about any time in between your credit card’s billing cycle, and the day you make your purchase on has a bearing on the number of interest-free days in respect to that particular purchase. This could vary from 55 days to 24 or 25 days, depending on your card’s billing and due dates.

With the example discussed above, while the purchase you make on 30th June gives you 25 interest-free days, if you were to make a purchase on 1st July, it would enter the next billing cycle, giving you until 25th August to make the payment.

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

If you don’t pay your account’s closing balance in full by the following due date you no longer have the privilege of interest-free days, which essentially means you’ll have to start paying interest. As long as you clear your outstanding balance in full each month, you don’t have to worry, and you can keep using the interest-free days on offer.

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.


How do interest-free days work? - Diagram explanation

Please refer to the explanation and diagram we have provided below for more information on how this credit card feature works.

interest-free-days-cc-diagram

Compare 55 days interest-free credit cards

Rates last updated December 10th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Interest Free Period
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Up to 55 days on purchases Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Up to 55 days on purchases Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
HSBC Platinum Qantas Credit Card
Receive 60,000 bonus Qantas Points on eligible spend within 3 months. Enjoy access to premium benefits and complimentary insurance.
19.99% p.a. $199 p.a. Up to 55 days on purchases Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Enjoy a low annual fee combined with 0% p.a. balance transfer offer for 18 months and 1% p.a. for up to 12 months on purchases.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Up to 55 days on purchases Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months. Also, enjoy an annual fee waiver in the first year.
0% p.a. for 3 months (reverts to 19.74% p.a.) 0% p.a. for 12 months $0 p.a. annual fee for the first year ($87 p.a. thereafter) Up to 55 days on purchases Go to site More info
Citi Clear Platinum Card
A low rate platinum credit card with a low interest rate on purchases and balance transfers.
0% p.a. for 9 months (reverts to 14.99% p.a.) 0% p.a. for 9 months $99 p.a. Up to 55 days on purchases Go to site More info
28 Degrees Platinum MasterCard
Benefit from no international transaction fees on purchases, no currency conversion fees and no annual fee.
21.99% p.a. 4.99% p.a. for 6 months $0 p.a. Up to 55 days on purchases Go to site More info
ANZ Low Rate
$100 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $58 p.a. Up to 55 days on purchases Go to site More info
American Express Platinum Edge Credit Card
Receive 10,000 Membership Rewards Bonus Points when you meet the minimum spend requirement. Enjoy a $200 travel credit every year and get 0% p.a. for 12 months on balance transfers.
20.74% p.a. 0% p.a. for 12 months with 1% balance transfer fee $195 p.a. Up to 55 days on purchases Go to site More info
BankSA Vertigo Visa
A low interest rate card with a low annual fee, a long term balance transfer offer of 0% p.a. for 18 months and an introductory offer of 1% p.a. for 12 months on purchases.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
Citi Rewards Platinum Card - Cashback Offer
Earn $250 cashback on eligible spend, plus enjoy 0% p.a. balance transfer offer for 12 months, discounted annual fees for the life of the card and a complimentary travel insurance.
20.99% p.a. 0% p.a. for 12 months $99 p.a. annual fee for the first year ($199 p.a. thereafter) Up to 55 days on purchases Go to site More info
ANZ Low Rate Platinum Credit Card
$250 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $99 p.a. Up to 55 days on purchases Go to site More info
American Express Explorer Credit Card
Receive 100,000 Membership Rewards Bonus Points on eligible spend within the first 2 months of Card Membership. Also enjoy a $400 travel voucher and two complimentary airline passes per year.
20.74% p.a. 0% p.a. for 12 months with 1% balance transfer fee $395 p.a. Up to 55 days on purchases Go to site More info

55 days interest-free period credit card - Video explanation

Click here for video transcript

- START

Hi, I’m Fred Schebesta. I’m here to explain to you what does up to 55 days interest-free actually means on your c redit card. The first thing is, I want to talk about 55 days. Now, 55 days here, there’s actually a little line that goes before that and it says ‘up to 55 days interest-free.’ Now when it says up to, what that mean is, is that it’s up to potentially the date that your statement arrives.

Now I’ve got a bit of a diagram that I want to explain it to you in some concepts. Now the first thing is, you’re not going to get interest-free days if you have a balance. If you have a balance, you just can’t get interest-free days, it doesn’t work that way.

The other thing is that, some cards offer potentially 44 days interest-free or some have actually no interest-free days, so it’s worth checking your card and comparing. When it comes down to it, this core concept of, ‘when is your payment due’. When your payment is due, this is when you have interest-free days up to. So I want to take you through an example here. Now, what I’ve drawn out here is a diagram where we have month one, month two and month three. And let’s just say that you get your statement on the 30th of the month. So we’ve just said here that we have three different statement dates. let’s pretend, on the first day of the month, on potentially on this seventh day of the month, you make a purchase. On that day, you will have 23 days interest-free, and let’s say you have a 55 days interest-free card, you will get another 25 days interest-free. So in total, this purchase on the seventh will actually give you 48 days interest-free. This here is your actual payment due date, and that is when you must clear your balance to keep getting interest-free days.

Let’s just say for example, you were to make a purchase on the very last day of the month, say on the 30th here, obviously it’s the last day of the month, you would only get the 25 days interest-free. So you can see it’s all about when is your payment due date and when is your statement date.

Now the next one is a little bit of a more intense concept - I just want to take you through this. Say you were to make a purchase, here, on the 8th day of the month. Now that purchase there, would not be due on your payment due date, but instead you will get the interest-free days, so the 22 days here, and the 25 days here, on the payment due date. On the 8th, you will get 47 days interest-free. So it’s all about when is your statement, when do you make a purchase and when is your payment due date. Remember, you must clear your balance on your payment due date, otherwise these purchases here will not get interest-free days. So, it’s important to compare if you have interest-free days, and you can do that at https://www.finder.com.au, and I hope that’s helped you out with your 55 days interest-free.

- END


What should I be wary of when using a credit card with an interest-free days offer?

Using a credit card with interest-free days on purchases can be good if you know exactly what you’re doing. Here are some of aspects you should consider:

  • Making minimum monthly payments. If you’re planning to make no more than minimum monthly payments towards your credit card, know that you won’t get any interest-free days at all.
  • Cash advances. If you use your credit card to withdraw cash, know that you have to pay interest on the same from day one. Interest-free days don’t apply on cash advances.
  • 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.

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 Frequently Asked Questions about interest-free period credit cards

What is the maximum number of interest-free days I can get?

With Australian credit cards that offer interest-free days, the maximum interest-free days you can take advantage of usually vary in between 44 and 55, depending on the card you use.

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?

Once you start paying your account’s closing balance in full each month again, you can start making use of interest-free days on purchases.

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American Express Essential Credit Card
American Express Essential Credit Card

Interest rate

14.99

Annual fee

0
ME Bank frank Credit Card
ME Bank frank Credit Card

Interest rate

11.99

Annual fee

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HSBC Platinum Credit Card
HSBC Platinum Credit Card

Interest rate

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Annual fee

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33 Responses to What does 55 days interest-free really mean?

  1. Default Gravatar
    Nicole | January 25, 2016

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

    • Staff
      Debbie | January 27, 2016

      Hi Nicole,

      Thanks for your inquiry.

      If these falls under bill payments then they may be considered as cash advances. I may suggest that you speak to your provider directly to confirm whether the payments for the mentioned services or utility providers are considered as cash advances.

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

      I hope this helps.

      Cheers,
      Debbie

  2. Default Gravatar
    Hayley | November 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?

    • Staff
      Jonathan | November 20, 2015

      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
      Hayley | November 20, 2015

      Hi Jonathan,

      ANZ – Platinum rewards

    • Staff
      Jonathan | November 22, 2015

      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

  3. Default Gravatar
    Ben | April 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?

    • Staff
      Jonathan | April 8, 2015

      Hi Ben, thanks for your inquiry!

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

      Cheers,

      Jonathan

  4. Default Gravatar
    Maria | September 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

    • Staff
      Elizabeth | October 1, 2014

      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

  5. Default Gravatar
    Stellah | September 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

    • Staff
      Shirley | September 17, 2014

      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

  6. Default Gravatar
    Cam | August 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?

    • Staff
      Shirley | August 27, 2014

      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
      | August 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

    • Staff
      Elizabeth | August 28, 2014

      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

  7. Default Gravatar
    Nesh001 | June 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

    • Staff
      Shirley | June 16, 2014

      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

  8. Default Gravatar
    Jas | October 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?

    • Staff
      Jacob | October 29, 2013

      Hi Jas.

      Thanks for your question.

      Please have a look at our page on 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 check boxes 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.

  9. Default Gravatar
    Kapila | October 19, 2013

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

    • Staff
      Jacob | October 21, 2013

      Hi Kapila.

      Thanks for your question. HSBC offer up to 55 days interest free with their credit cards. You can compare HSBC credit cards on this page. You can find out information about these credit cards by reading the cards review.

      I hope this helps.

  10. Default Gravatar
    John | June 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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