Many credit cards offer interest-free purchases. And some credit card providers offer 44-day (or longer) interest-free periods for purchases.
‘What’s the catch?’ you might ask? Well, there is one… which we’ll explain. The interest-free period – in our example it’s 44 days – is counted from statement issue date to the payment due date.
So while you do get up to 44 days to pay off a purchase without incurring any interest, the count is based on the cycle date of your statement.
If you purchase an item 10 days after your last statement has been issued, you then have 34 days to pay for the item in full before interest is applied.
For the record, if you don’t repay the item in full within the interest-free period, some credit card providers will charge interest from the date of purchase.
That’s why credit card companies usually mention that you have “up to 44 days” rather than “44 days”.
So rather than having an effective cashflow management tool – i.e. a credit card with 44 days’ interest-free – you end up with a financial burden and evidence of undisciplined spending habits.
It’s a technicality whether or not you receive the full 44-day interest-free period. Just make sure you’re aware of your statement period and – if you want to get the full 44 days – make your purchases on the first day of each statement.
To fully understand how your 44 days’ interest-free period is calculated, check your credit card product disclosure statement, terms and conditions or provider’s website.
Every provider has a different statement cycle period and length of time for the due date. So, it’s not as simple as starting at day one each month and counting to 44 for the interest-free days.
Is a credit card with 44 interest-free days right for me?
Something to consider when shopping around for an interest-free credit card is your pay cycle. It’s a minor point but could be an aid to maximising the value of your credit card.
A credit card with a 44-day interest-free period gives you 44 days from statement issue date to the payment due date to pay for any purchases without interest being charged.
Your ability to do this could be impacted by when you get paid. If you're paid bi-monthly (which would be tough) this might create stress when attempting to keep on top of 44-day payments.
It’s worth attempting to sync your pay days with your credit card cycle as part of a well-managed personal financial system.
How to make the most of your interest-free period?
It’s quite simple: make sure you pay for any purchases made within each statement period by the due date. Setting up automated payments for the amount you’ve spent will ensure you do this.
Oh, and if possible, you might want to see if you can make major purchases or pay bills on the first day of each statement cycle.
That way you are guaranteeing yourself that interest won’t be charged on purchases for the full 44 days.
Credit cards can be your best friend if they’re managed responsibly. However, there are a few of us out there who might not know just how easy it is to turn credit to our advantage.
And you can do this beyond just the interest-free days too. Choosing a competitive credit card might also put you ahead financially – for example, if you get a rewards card that doesn’t have an annual fee, and you pay off the entire bill every month. That way, you earn rewards and never have to pay a cent in fees or interest.
Are some 44 interest-free credit cards days better than others?
We know that interest-free is interest-free, but what makes a difference to your credit card’s bottom line are the fees charged by your provider.
And when the fees are charged will also vary between credit card products. An important piece of information here is the fact that different providers will offer different periods for due dates.
One credit card provider might calculate a statement cycle as 30 days and provide an additional 14 days for the due date. There’s your 44-day interest-free period!
Here are a few things to consider when shopping around for a 44-day interest-free credit card:
- Look at the annual fee charged
- Compare the interest rate for purchases
- Make sure you’re OK with the cash advance rate (if this is an important factor)
- Take into consideration the balance transfer offer (or if there is one)
- Think about whether you want rewards or other fringe benefits
- Read the fine print to understand the terms for the 44-day interest free period
Comparison tools like RateCity make this process so much easier for you. When you know what you’re looking for, you can get on with improving your finances.