How do interest-free days work on your credit card?

Interest-free days are worth investigating further if you want to take maximum advantage of paying prior to the interest meter being turned on. In theory, the number of advertised interest-free days is correct, providing you do all your spending the day after your last statement was printed. In reality, though, you don’t use your card that way and the number of free days you have are a lot less than you think.

Canstar research reveals that:

  • 18 cards or 26% offer 14 or more days after the statement date (advertised as up to 44 free days)
  • 50 cards or 72% offer 25 or more days after the statement date (advertised as up to 55 free days)

While technically not misleading, it is easy to trip up and accidentally incur interest so be aware of the pitfalls and calculate how many interest-free days you really do have on your credit card.

Where credit card holders often go wrong is that they spend late in the monthly cycle and get far fewer interest-free days than they expect. For example, if a credit card month runs from the 1st to the 30th of the month, a purchase on the 1st will have 55 days free credit, but on the 30th will have 25 days.

To get the best out of the interest-free days, consumers should always pay the bill on the last day possible if they are paying manually. Those who have an automatic payment set up to cover the entire monthly bill should arrange the payment to go out on the last of the 55 or 44 days.

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