Understanding interest-free days

Let’s face it, no one likes paying interest – so here’s some good news. If you have a credit card with interest-free days, and you pay off your balance in full each month, you could avoid paying interest on purchases made with your card.

You can think of them as a period of time when you won’t be charged interest on purchases you make with your card. In other words, they give you access to a short period of interest-free credit – as long as you pay off your balance in full by the due date.

Below, we explain how interest-free days’ work. While it can be confusing, the key thing to remember is that interest-free days only apply if you pay off your balance in full each month. If you don’t, you’ll pay interest on purchases made with your card (more on this later). That’s why paying off your full balance by the due date, if you can, is the best way to avoid paying interest.

It depends. Some cards have up to 44 interest-free days, some have up to 55 interest-free days, some have a different interest-free period, while some cards have no interest-free period at all. If you’re not sure what your card offers, check your credit card conditions of use or contact your provider.

The ‘up to’ is important. If your card has up to 55 interest-free days, that doesn’t mean you get 55 interest-free days on every purchase. It depends on when you make the purchase.

For example, the interest-free period on purchases generally runs from the beginning of your statement period (you can find your statement period at the top right of an ANZ statement). Let’s say your statement period begins on the first of the month and you have a zero balance. The diagram below shows:

• If you bought running shoes on 1 November, you’d get 55 interest-free days on that purchase provided you pay off their current statement balance in full by December 25th (the due date).
• However, if you buy a suit for your new job on 10 November, you’d get 46 interest-free days on that purchase.
• And, if you bought a phone on 25 November, you’d get 31 interest-free days on that purchase.

Remember, it’s 'up to' 55 days, not 55 days for every purchase. 

This example is for illustrative purposes only and may not reflect the terms of your credit card.

At ANZ, to get the benefit of interest-free days on purchases, you need to pay off your balance in full by the due date. If you don’t, you’ll pay interest on your purchases from the day you make them. You’ll also lose the benefit of interest-free days for at least the next statement period. That’s why we recommend always paying off your balance in full each month, if you can.

To regain your interest-free period on purchases, you’ll need to pay off the full balance by the due date in a subsequent statement period.