How do interest free days work with your credit card?

You might see credit cards offering an interest free period – but what does this actually mean? And how can you make the most of it? Let’s take a closer look.

1 minute read

What are interest free days?

An interest free day is a period in your statement cycle where you can buy things without being charged purchase interest for a certain number of days. To be eligible, you need to pay your closing balance (excluding any promotional or introductory balance transfer amount) in full by the due date each month.

How are they calculated?

The actual number of days you’ll get depends on when you make your purchase in your statement period – this is why you’ll always see ‘up to’ before the maximum number of days.

Let’s say you have a credit card with up to 55 days interest free on purchases.

As long as you paid your full closing balance the previous month, you’ll get the full 55 days interest free on any purchases made on the first day of your statement period, 54 on the second day and so on. If you buy something on the day your statement period ends, you’ll get 25 days interest free. The earlier you make the purchase, the more interest free days you’ll get.

What if I miss a full payment?

If you pay less than your closing balance, you won’t be eligible for interest free days during that statement cycle. And you’ll be charged interest on the outstanding balance – this will appear on your next statement.

You can get your interest free perks back in your next statement cycle by paying down your closing balance by your due date.

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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.