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0% purchase rates can help you keep credit card repayments low and avoid debt for a limited time. Compare 0% purchase rate card fees, features and other benefits today to find a card for you.

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Mark Bristow

Updated on

20 May, 2025

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Interest-free credit cards – pay a 0% purchase rate on your shopping for a select period

An interest-free credit card offers a 0% purchase rate for a limited period. It means you can use the card to make purchases or pay off existing debt during this period without any interest being charged.

However, this period is usually limited, and once it concludes, your card will revert to the standard purchase rate. Any remaining balance on the card or any new purchases will incur interest unless you pay them off before the interest-free period ends. Ensure you're vigilant and track your interest-free period to avoid paying unnecessary interest or any possible fees.

What is the purchase rate on a credit card?

The purchase rate on a credit card is the interest you need to pay on your regular credit card purchases made online or in-store.

When you use a credit card to pay for goods and services, you're borrowing money from the card issuer. If you repay this amount on time, you’ll unlikely incur any additional costs beyond the purchase amount. However, it will incur interest and possibly other costs if you don't repay it on time.

Most credit cards allow you up to 45 to 55 days to repay your monthly spending without charging any interest. However, once the interest-free days on your credit card expire, you'll start being charged interest on any outstanding balance at the purchase rate.

It's worth remembering that the same interest rate may not apply to all interest charges on a credit card. For example, the interest rate charged on a cash advance, or when you use your credit card to withdraw cash, is likely much higher than the purchase rate.

There are also balance transfer credit cards on the market that allow you to transfer your outstanding balance from another card and not charge any interest on this amount for a specific time. But you’ll likely still be charged interest at the purchase rate when you make new purchases with a balance transfer card.

What does a 0% purchase rate mean?

Some credit providers offer 0% purchase rates as introductory offers when you sign up for one of their credit cards. A 0% purchase rate allows you to make interest-free purchases with the card during the introductory period. However, your interest rate will revert to the standard purchase rate once this initial period ends, and your balance and any new purchases will start accruing interest.

Credit card deals offering 0% purchase rates are usually promotional, encouraging people to apply within a limited period to take advantage of interest-free spending. It’s a way for credit card issuers to attract new customers by promising no interest on purchases for a set period.

Such deals could be helpful if you're planning a major expense and don’t have the cash to pay for it upfront, or it may be better for your budget to put it on credit. Whether it's replacing your furniture, buying an appliance or taking a vacation with an interest-free credit card, it's possible to pay off your purchases in smaller instalments without any interest charges.

Sounds too good to be true? It could be if you're not careful to check the other fees and charges associated with the card aside from the purchase rate. Here are some hidden fees and charges you need to look out for:

Annual fee – Some card issuers may charge an annual fee for allowing you to use their card.
Cash advance fee – This is the interest rate charged when you use your credit card to withdraw cash at an ATM or a retail outlet.
Foreign transaction fee - This is a fee your bank charges when you convert a transaction from one currency to another, such as using your card while travelling overseas or shopping online at an overseas retailer.
Statement fee – As most card issuers make a push towards going digital, you may find yourself being charged a small amount for receiving physical card statements via the post.
Inactivity fee – This one might take you by surprise. Some credit cards charge you an inactivity fee if you don't use the card for a few months or don't meet a pre-set annual spending limit.
Late payment fee – Your card issuer may charge you a late payment fee if you forget to pay your credit card bill on time.

Note that this is not an exhaustive list, and it's important to review the Product Disclosure Statement for complete information on costs related to a credit card.

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How do no-interest credit cards with a 0% purchase rate work?

Any credit card that claims to be a "no-interest credit card" or a card with "0% interest" is a card with a temporary period where your purchases are not charged with interest.

The interest-free period is usually a short period, typically for a few months up to a couple of years, and is often associated with a promotion. The length of this period is always outlined as part of the terms when you sign up, so ensure you read them and take note.

After this promotional period is over, any remaining balance on the card and any new charges you make will be charged with a standard interest rate.

A lot of these cards can also come with an annual fee that may be discounted or waived during the 0 interest promotional period or another period. This will be charged once this waiver period ends, so make sure you know the ongoing charges.

While the no-interest promotional period is often only offered with some cards as an introductory offer, credit card holders can use this to reduce their debt by paying as much off as possible during the no-interest period.

Not all cards will offer a no-interest period, and you should understand the product disclaimer details that come with credit cards.

What are the pros and cons of no-interest credit cards?

Benefits

No-interest credit cards give customers, particularly those wanting to make high ticket purchases, additional time to pay off their debt.
Unlike most other credit cards, which tend to offer up to 55 interest-free days, a credit card with a 0% introductory period often gives customers between several months to a couple of years before interest is charged.

Drawbacks

When the no-interest period ends, the standard credit card interest rate for purchases will be applied, which may not be the most competitive.
If you haven't been paying off your credit card bill, you could be in serious financial hot water after the interest-free period ends. Your balance will start accruing interest at the standard purchase rate, which means you’ll accrue debt.
No-interest credit cards could also come with higher fees.
You need to monitor how long your interest-free period lasts to know when you will be hit with interest.

How can I apply for a no-interest credit card?

Applying for a no-interest credit card is similar to applying for a standard credit card.

Before you sign up for anything, spend some time doing your research on different types of credit cards and their associated fees and features to find the one that suits you best. You'll also need to weigh up the pros and cons so you're aware of any downsides of an interest-free credit card. It also helps to check your credit score before applying to ensure you're in sound financial health before taking on new debt.

You can then apply for a no-interest credit card through the card issuer you’ve chosen to go with.

Don’t forget that as attractive as a no-interest credit card might be, it may have some downsides, such as hidden fees. So, you need to weigh up all the pros and cons, compare the different offers and consider the consequences before signing up for a no-interest credit card.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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Interest-free credit cards – pay a 0% purchase rate on your shopping for a select period