Credit cards offering up to three months interest-free



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Buy now… and pay much later. There are a handful of credit cards in Australia that allow you to do just that.

More than 100 credit cards on the RateCity credit card database have maximum interest-free periods of 55 days.

But Flexigroup, Beyond Bank, People’s Choice Credit Union and Bank of Us have credit cards with even longer interest-free periods:

Credit card Interest rate (ongoing) Annual fee Interest-free days (max.)
Flexigroup Skye Mastercard 23.99% $99 90
Beyond Bank Low Rate Visa Credit Card 12.49% $49 62
People’s Choice Credit Union Visa Credit Card 12.95% $59 62
Bank of Us Visa Credit Card 9.99% $39 57

Regardless of the credit card you choose, it’s important to use it responsibly, because if you don’t manage the repayments, you might find yourself in a debt trap.

Why 55 days can sometimes mean 25 days

One thing to be aware of with interest-free periods is that you can’t assume you’ll always be entitled to the exact number of days quoted.

That’s because most credit card providers talk about “maximum” interest-free periods or interest-free periods of “up to” a certain number of days.

With most credit cards, the interest-free period begins not when you make a purchase but at the start of your statement cycle.

For example, let’s say your credit card has an interest-free period of up to 55 days, and that the card’s cycle begins on the first day of each month – January 1, February 1, March 1, etc. Any purchase made during January would be due on February 25 (or January 1 + 55 days).

So a purchase made on January 1 would have an interest-free period of 55 days, but a purchase made on January 31 would have an interest-free period of 25 days.

Start of cycle Interest-free period End of interest-free period
January 1 January 1 + 55 days February 25
February 1 February 1 + 55 days March 28
March 1 March 1 + 55 days April 25

Some low-rate credit cards don’t have interest-free periods

There are also credit cards that have interest-free periods of 0 days.

With these credit cards, you start running up interest immediately. So even if the rate is relatively low by credit card standards, your debt can quickly increase.

Credit card Interest rate (ongoing) Annual fee Interest-free days (max.)
Northern Inland Credit Union Low Rate Visa Credit Card 8.99% $0 0
Bank Australia Low Rate Visa Credit Card 9.39% $59 0
Heritage Bank Gold Low Rate 11.80% $0 0
Qudos Bank Lifestyle 12.34% $0 0
Suncorp Bank Standard Card 12.74% $55 0

How to switch credit cards

If you want to compare credit cards and then switch to a better alternative, there are two ways you can go about it.

The first way involves paying off the entire debt on your current card, closing it and then opening a new credit card account.

The second way involves doing a balance transfer, which means transferring the debt from your current card to your new card. However, there are likely to be a couple of catches:

  • You probably won’t be able to transfer your entire debt
  • You’ll probably have to pay a balance transfer fee

One positive, though, is that many balance transfer credit cards allow you an interest-free period (of, say, 12 months), which gives you the chance to clear all your debt without also having to pay interest.

If you do a balance transfer, you might want to close your old credit card account, so you don’t have to pay two annual fees. Also, it’s generally a good idea to avoid using the new card, because the interest-free offer will  apply only to the debt you transferred, not any new debt.

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