Compare Australian Interest Free Credit Cards

Interest free credit cards get a lot of, well, interest from financially savvy types. Basically, they give you the flexibility to spend money on credit (and possibly earn rewards points) and pay no interest at all, for a certain period of time.

Read more

How do interest free credit cards work?

Interest free credit cards are offered to new customers as an incentive for switching credit cards. Some credit cards will have interest free rates for purchases but you can also get intro rates when you transfer a balance from another credit card. A 0% purchase rate, for example, lets you make purchases on your credit card without a charge for a set period of time.

Are there any tricks and traps with interest free credit cards?

There are indeed. Some cards will revert to high cash advance rates for balances not paid off within the interest free period. And most cards don't apply the intro period to such things as cash advances.

Page last updated April 7, 2020

Interest free credit card comparisons on Mozo - rates updated daily Mozo has robust processes to ensure our site is updated to reflect the latest information from providers. There may be the odd occasion where updates are delayed, so please confirm information before purchasing.

Want more? Compare all 219 credit cards in the Mozo comparison engine.

Compare more credit cards

^See information about the Mozo Experts Choice Credit Cards Awards

Credit Card Resources

Views, news, tips and guides to help find the best credit card for you.

Interest free credit cards

So, what’s the go with… credit card interest-free days?

Credit card interest-free days are a set number of days (usually 44 or 55) in which you don't have to pay interest on credit card purchases.

Interest-free days start at the beginning of your credit card statement period & you’ll get the same number of interest-free days each period ...as long as you pay your balance off in full & on time each month!

Right. So, how do they work?

If you make a purchase on the 1st day of the interest-free period… then you'll have the maximum number of interest-free days to pay your credit card balance off in to avoid interest charges. But, if you make a purchase in the middle of the interest-free period… then you’ll only have half the time to pay it off in to avoid interest charges.

Here's an example for the visual learners:

Say you take out a new credit card which offers 44 interest-free days. On day 1 of the statement period, you buy a new pair of $200 shoes. To avoid paying interest, you’ll need to pay your credit card balance off within 44 days.

Then on day 26, you buy a $300 portable speaker. Which means… you'll only have 18 interest-free days left to pay it off in to avoid interest charges. Make sense?

Ok. But, what happens if I don’t pay my credit card balance off in full? Well, it's simple. You’ll lose your interest-free days for the next month & have to pay interest on your purchases. ...But don’t worry, you can get them back!

How do I get my interest-free days back if I lose them? Just pay your credit card debt off in full… & your new interest-free period will start from the day your balance is paid!

We've all seen those flashy credit card TV commercials that promise an enticing interest-free purchase or balance transfer offer. And who doesn't like the sound of 0% spending or paying off debt-free of the pressure of interest?

But if you're wondering whether these interest-free deals are all they're cracked up to be, then have a read of our quick guide which will run you through the different types of 0% interest offers available and the tricks to use these cards like a pro.

What are the different types of interest-free credit cards?

0% purchase rate credit cards:

Need an interest-free credit card to pay for a big upcoming expense like a wedding or small home refresh? Or, maybe you’re after one to help get you through the holiday season? Then it sounds like you could be in the market for a credit card with a 0% purchase rate deal!

With a 0% purchase rate credit card, as long as you meet the minimum repayments each statement period, then all purchases you make (excluding ATM withdrawals) will be interest-free for a set period of time.

0% balance transfer:

If you want to blast some debt, then the interest-free credit card option you might consider is a balance transfer offer.

Say that you've got some credit card debt, but you're struggling to pay it off because your current card has a high-interest rate. 

Well, with a balance transfer (BT) offer, you can move your balance across to a different provider and be charged no interest for the balance transfer period, which usually ranges from 3-12 months (some as much as 20 months).

Check out our top tips on how to make a balance transfer card work for you.

0% foreign transaction credit cards:

If you’re looking to make overseas purchases without copping high-interest charges, then unless you’re going with a trusty travel credit card, you might consider picking up a 0% foreign transaction credit card.

Debit cards:

While technically not a credit card, debit cards are linked to either Visa or Mastercard network which means that you can use them wherever these cards are accepted. The beauty of opting for a debit card is that you’re spending your own money, so you won’t cop any interest charges for borrowing money from the bank.

What are interest free days?

Did you know that most credit cards usually come with either 44 or 55 interest-free days?

This means that if you diligently pay the full amount you spent during the statement period by the due date, you won't be charged any interest ever.

Your interest-free period will begin at the start of your credit card statement period. As long as you pay your balance off in full each month by the due date, you’ll get the same amount of interest-free days each statement period.

How do interest-free days work?

Here’s where things can get a bit tricky. To put it simply, you don’t necessarily have the same amount of interest-free days to pay each credit card purchase off in.

If you make a purchase on the first day of the interest-free period, then you'd have the maximum number of interest-free days to repay your credit card balance to avoid being charged interest.

But if you make a purchase in the middle of the interest-free period, then to dodge any interest charges, you’d need to pay your credit card balance within half the time.

How many interest-free days do credit cards have?

While your credit card might come with 44 or 55 interest-free days in total, this does not mean that you’ll have that many days to pay each purchase off from the purchase date.

Scenario:

You take out a new credit card which offers 44 interest-free days. On the first day of your credit card statement period, you go and treat yourself to a new pair of $200 shoes. To avoid paying interest on the shoes, you’ll need to pay your credit card balance off within 44 days.

Then, on the 26th day of your credit card statement period, you spoil yourself to a new $300 portable speaker. Since you bought the speaker on the 26th day of the statement period, unless you want to be charged interest, you’ll only have 18 interest-free days left to pay the speaker off in.

Balance transfer offers and interest free days

Please be aware that interest-free days don’t usually apply if you’ve taken up a balance transfer offer, though this isn’t always the case for all providers.

Some providers actually offer 0% interest on balance transfers in addition to an interest-free period on new credit card purchases. So it’s always wise to double-check the PDS (that’s short for Product Disclosure Statement) just to be sure.

What happens if I don’t repay my credit card balance in full?

If you don’t pay your credit card balance off in full before the interest-free period ends, you won’t just be charged interest on the purchases you’ve made, you’ll also lose the privilege of having interest-free days for the next month.

How do I get my interest-free days back?

All you need to do to get those interest-free days back is pay your credit card debt off in full and your new interest-free period will commence from the day your balance is repaid.

Top interest free credit card tips:

While interest-free credit cards are a great way to ditch sky-high interest rates, there are some rules to follow to ensure you use the card to your advantage without falling into credit card debt. Here are some of our top tips:

1. Set a budget

Whether you're looking to use an interest-free credit card to make purchases or as a way to ditch debt, it's super important to set and stick to a solid budget.

0% Purchase rate: While you'll be free of interest for a set period, make sure to only spend what you can afford to repay before the interest-free period comes to an end. The best way to avoid spending above your means is to set a solid budget that you can stick to.

0% Balance transfer:

Before you take out a balance transfer deal, first, you need to determine exactly how much you'll need to repay each month because just paying the minimum won't necessarily clear the debt within the balance transfer period.

For instance, with a 10-month balance transfer offer and a $5,000 debt you would need to repay $500 a month to clear the debt within the balance transfer period.

2. Choose the right interest free term (3, 6 or 12 months interest free)

Think about how long you'll need the interest-free period for. This is especially important if you're planning to use the interest-free card for long term expenses.

12-month interest-free credit cards are pretty popular in Australia, but when you consider Mozo's database shows 0% purchase rate terms ranging from 3-24 months, make sure you find a term option that suits you best.

The same goes if you're looking to roll your debt across to a balance transfer card, as you'll need a term that you can realistically repay the balance off in before the BT offer reverts to a higher rate.

Have a play around with our credit card debt payments calculator to get an idea of which term would suit you best.

3. Look for a low annual fee

When you start your search for an interest-free credit card, you shouldn't just search for one with the longest term, you'll also want to find one with an affordable annual fee.

Think about it, what's the point in going for an interest-free card if the benefit is negated by a pricey ongoing fee?

4. Check the revert interest rate

If you plan on keeping the plastic in your pocket after the interest-free period comes to an end, it's worth checking that the card reverts to a competitive ongoing interest rate, ideally one that's below 15%.

5. Set up automatic repayments

Once you've got the card in your pocket, you can make your repayments a total breeze by setting up a regular direct debit from your bank account to the lender. This way you can avoid missing repayments.

6. Avoid cash advances

Remember, the 0% offer only applies to purchases or the balance transfer. So if you withdraw cash from an ATM you'll cop a cash advance rate, which, according to the Mozo database, usually sits above 20%.

On top of this, interest-free days don't apply for cash advances, so you'll be charged that interest instantly.

7. Pay your balance off before the interest-free period ends

This tip may be last on our list but it is probably the most important! Paying off your balance in full within the introductory period means you can enjoy an interest-free period.

This can come in handy if you need to fund a big-ticket item or pay off any debt.

Where can I find great-value interest free credit cards on Mozo?

Think you've got a handle on how to use an interest-free card the right way? Then start comparing deals in the table above or you can search our entire product database by using our credit card comparison tool.

Alternatively, if you're looking to blast some debt, then use our Switch & Save Calculator to see how much you could save by transferring your debt over to an interest-free deal today!

Written by: Kelly Emmerton, Mozo Money Editor

Picture of Kelly Emmerton
Kelly Emmerton
Money editor

Kelly Emmerton was the Money Editor at Mozo until March 2020. With over 4 years experience writing exclusively in the Australian finance space her in-depth knowledge spans all areas of personal finance, from home loans to travel money. Kelly has a background in communications and when she’s not delving into finance industry stats and product disclosure statements, you’ll find her on the beach reading classic sci-fi.

Credit Card Reviews

Bank of Melbourne Vertigo Platinum review
Overall 0/10
Worst bank ever.

Worst bank ever. Horrible customer service and long hold times.

Read full review

Worst bank ever. Horrible customer service and long hold times.

Price
0/10
Features
0/10
Customer service
0/10
Convenience
0/10
Trust
0/10
Less
Mathew, Victoria reviewed 1 day ago
ANZ First review
Overall 5/10
Very helpful

They have been very helpful.

Read full review

They have been very helpful.

Price
4/10
Customer service
5/10
Convenience
5/10
Trust
5/10
Less
George, Western Australia reviewed 4 days ago
NAB Low Fee Card review
Overall 8/10
Competitive rewards program

There are less and less branches, and the branches that are left are only open for short hours. Everything is referred back to online. There are times that you just want to speak to someone face to face. I don't trust online with all details of my finance.

Read full review

There are less and less branches, and the branches that are left are only open for short hours. Everything is referred back to online. There are times that you just want to speak to someone face to face. I don't trust online with all details of my finance.

Price
6/10
Features
8/10
Convenience
4/10
Trust
7/10
Less
Karina, New South Wales reviewed 4 days ago