How to make your credit card interest-free

No one likes paying interest. So why would you pay it on your credit card if you can avoid it? 

The truth is, there are a handful of hacks to make your credit card interest-free without chopping it to pieces.  

One simple way to avoid paying interest on your credit card is by paying down your balance in full, month to month. While this might seem obvious, what it means is that whether you have a card with a 0% or 24.99% interest rate, you won’t be charged either way. 

So, say you have a rewards credit card with a hefty interest rate in return for a killer points earning system: if you spend and then repay what you owe each month you’re essentially using an interest-free card with all the perks! 

How do I change my credit card to 0% interest? 

Another option is to take advantage of a 0% introductory interest rate! 

Currently on the Mozo database there are 19 credit cards that come with an introductory interest-free offer, for between six and 17 months. This means that for a period of time you won’t be charged any interest at all. A 0% intro offer could be a perfect option if you have a big purchase in mind that you need a few months to pay off, or you intend your spending might bump up over a period of time. 

But it’s important to note that once the offer is up you will have to start paying interest, and in some cases credit card revert rates can be hefty. 

On the other hand, there is the option of a 0% credit card, such as the NAB StraightUp or CommBank Neo. Similar to Buy Now Pay Later, you’ll pay absolutely no interest when you make purchases on these cards. Instead, there is a monthly fee which is calculated in accordance with your credit limit and spending. 

How do interest free days work on a credit card? 

You may have seen 44 or 55 “interest-free days” advertised with a particular credit card - but what does that mean exactly? Let’s break it down. 

Interest-free days are a credit card feature which refers to how long you may go without paying interest on purchases, if you pay down your balance in full each month. 

The interest-free period starts at the beginning of your statement period. However, the timing of your purchase will determine how many days you receive. 

For example, say you have a credit card with 55 interest days: if you make a purchase on the first day of your statement period, then that purchase will have the full 55 days. However, if you make your purchase on the tenth day of your statement period, then that purchase will have 45 interest free days. So the later in the statement period you make the purchase, the fewer interest free days you receive on that particular transaction. 

While 44 or 55 interest-free days are more common on a credit card, on the Mozo database some cards offer all the way up to 110 interest-free days. 

Is it a good idea to do a balance transfer?   

If you have a bunch of credit card debt that you need to clear, a balance transfer offer is a good idea. 

Balance transfer offers come in all shapes and sizes, with the longest 0% offer on the Mozo database sitting at a massive 36 months. 

With these offers customers are charged 0% interest on their existing balance for an agreed period of time. However, because they are designed for clearing debt, any new purchases made on the card will not be subject to 0% interest. Instead, customers will be charged a hefty purchase or cash advance rate. 

So, a tactic to make your credit card interest-free through a balance transfer, is only a savvy option if you wish to clear your credit card debt without making new purchases. 

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