A credit card's interest-free days let you spend money now and then pay it off a bit later without paying any interest.
The interest-free period starts on day 1 of your card's 30-day statement period. Making a purchase earlier in the statement period gives you more interest-free days.
Credit cards offer between 44 and 55 days interest-free, but it depends on the card.
What are interest-free days on a credit card?
Credit cards have statement periods that usually run for 30 days. Day 1 of a statement period is also day 1 of the card's interest-free period.
Let's say your credit card gives you 55 days interest free. This means you have 55 days from day 1 of the statement period before you get charged any interest on your card purchases.
Any purchases made on day 2 give you 54 days interest free. By day 3 you have 53 interest-free days left. If you make a purchase on day 30, the last day of the statement period, you have 25 days before interest is charged.
Once you hit the 55-day mark you can pay off all your spending and pay no interest. Or you'll get charged interest on any unpaid balance on the card.
Example: How to use the interest-free period on a credit card
Say you had a credit card that offers 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 it works:
1 June. First day of the statement.
30 June. Last day of the statement.
25 July. The 55 day interest-free period ends. This is also the payment due date for this statement period.
Now here's how your card spending breaks down over this statement period.
You make a $200 purchase on 1 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 20 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 30 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.
Will I get a new 55-day interest-free period if I don't pay off my previous month's balance in full?
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.
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.
Key terms for interest-free days
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.
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 interest charge.
Is a credit card with interest-free days worth it?
Most credit cards in Australia offer interest-free days on purchases. It might not be the most important feature to you, but it does give you more flexibility in how you spend.
Let's say you have a $2,000 purchase coming up. Paying cash would take a big chunk out of your savings but payday is still 2 weeks away.
In this case, interest-free days would be really helpful. You could make the $2,000 purchase today and wait a few weeks before you have to pay the purchase off.
How to make interest-free days work for you
Understand how the interest-free days and your statement period work. The interest-free period starts when your statement period starts. You don't get 55 days from the start of every single purchase. If you make a big purchase on day 30 of the statement period you have far fewer interest-free days.
Time big purchases carefully. If you have big purchases coming up and want to maximise your interest-free days, make the purchase at the start of your statement period. This gives you more time before you have to pay it off.
Choose your credit card carefully. Interest-free days are a great card feature. But don't forget to look at the card's annual fee, purchase rate and any perks or benefits, like rewards or frequent flyer points.
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
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. These are also other cards that offer extended interest-free finance options with specific retail partners.
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.
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.
If you set up an instalment plan for part of your 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 are shown on your credit card statement. If you're unsure, contact your provider to check whether you can still get interest-free days when you have an instalment plan.
Some credit cards let you make interest-free purchases when you have a balance transfer, as long as you pay the entire purchase balance for your statement. These details will typically be shown 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. And Westpac has a "Monthly Payment Balance" that shows the amount you need to pay to get interest-free days on purchases. But other cards only offer interest-free days for purchases when you pay the account's entire closing balance, including any balance transfer debt. So it's important to check these details and plan your repayments to make sure it's manageable.
Buy now pay later services let you make a purchase and pay it off in installments. Like with a credit card, if you make the payments on time there should be few if any extra costs (some BNPL companies charge a monthly account fee). But if you miss the payments then you pay late fees. Like interest, these fees can really start to add up.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio
Richard's expertise
Richard has written 554 Finder guides across topics including:
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 565 Finder guides across topics including:
If you only paid 95% off the credit card, will you:
a) lose the 55 days free interest rate from the next due date; and
b) be charge full interest for subsequent purchase until your credit provider restores the free 55 day period.
IndulaOctober 7, 2008
can the whoever wrote the post explain what does it mean “a new purchase”??
[Quote]No. It means that the maximum number of days you won’t be charged interest for a ****new purchase*** is 55 days.[Quote]
TinhOctober 18, 2006
If you purchased something on the 26th of May, it will appear in your May statement. Your May statement will be due around the 24th of June.
If you purchased something on the 19th of July, it will appear in your July statement. Your July statement will be due around the 25th of August.
So if you make a purchase in a particular month, that amount will be due the next month by a due date depending on how many interest free days you get.
FredOctober 16, 2006
When would the next payment be required if I bought something on the 26th of May? Would it be the 19th of July?
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If you only paid 95% off the credit card, will you:
a) lose the 55 days free interest rate from the next due date; and
b) be charge full interest for subsequent purchase until your credit provider restores the free 55 day period.
can the whoever wrote the post explain what does it mean “a new purchase”??
[Quote]No. It means that the maximum number of days you won’t be charged interest for a ****new purchase*** is 55 days.[Quote]
If you purchased something on the 26th of May, it will appear in your May statement. Your May statement will be due around the 24th of June.
If you purchased something on the 19th of July, it will appear in your July statement. Your July statement will be due around the 25th of August.
So if you make a purchase in a particular month, that amount will be due the next month by a due date depending on how many interest free days you get.
When would the next payment be required if I bought something on the 26th of May? Would it be the 19th of July?