Common Credit Card Interest Free Period Conditions

Most credit cards come with an interest free period for new purchases but this feature is not one that should ever be taken for granted.

Whether it is 30 or 55 days interest free, chances are there will be a range of conditions that need to be met before cardholders can take advantage of the offer.

So for people who have only skimmed the fine print, this may mean a nasty surprise when a statement comes with interest charges that do not seem like they belong.

To avoid this kind of situation, be sure to check for the following conditions before assuming anything charged to the card will automatically benefit from an interest free timeframe.

The Amount Of Interest Free Days

While it is common for credit cards to offer a certain amount of interest free days for new purchases, the actual amount will be based on when the statement period starts.

A purchase made 10 days before a statement is due on a card with up to 55 days interest free, for example, will start accumulating interest after those 10 days even if the lowest interest rate option has been chosen.

Carrying A Balance

Balance transfers are a great way to clear credit card debt, but these offers may not be so great for new purchases.

Credit cards offering a balance transfer deal might still be advertised with a number of interest free days but generally if a balance is carried there will be no interest free period.

Some cards even specify that there must be no balance on a card for the interest free days to be applicable, which is another reason to check the fine print before making any assumptions.

Eligible Purchases

Just like some charges put on a credit card will not earn you rewards points, they may not be eligible for interest free days.

Everyday purchases are the most likely to have an interest free period option, while recurring transactions or bill payments may not receive the same advantage.

It is particularly good to check the details when a card advertises up to a certain number of days interest free “on new purchases”, because that usually suggests only charges considered purchases will be eligible.

Credit Scores

Most cards now say there are “up to” a certain number of interest free days available but there is a reason for this particular phrase.

As well as being conditional on the statement period and balance, some credit card issuers may decide not to offer interest free periods to people with a low credit score.

The terms and conditions usually have a section outlining how and when card conditions may change depending on the cardholder’s situation, so be aware that “up to” does not always mean you will be getting away interest free.

With so many cards now offering an interest free period, understanding the conditions around this feature will help you save money on your card as often as possible.