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Find out what an interest free period is and how to make the most of it

How do interest rates work and what is a purchase rate?

Interest is the cost associated with borrowing money and is expressed as an annual percentage rate. The purchase rate refers to the rate that is charged on purchases made with the credit card.

What is an interest free period and how is it calculated?

An interest free period is a period of time where no interest will be charged on new purchases, provided the total amount owing on your current statement is paid by the due date, and you also paid off your previous month’s balance in full by its due date. All of our cards, other than a Business Low Rate card, come with an interest free period on purchases of up to 55 days.

The dates will vary each month but each statement period will run for around 30 days. After your statement closes, you have an extra 25 days to pay the full balance. Combine the number of days and that’s how we get your maximum 55 days. The actual interest free period for any purchase depends on when you make the purchase. Here is an example that assumes you paid the total amount owing on your previous statement by its due date.

interest period example
credit card statement example

In summary:

  • 16 August 2015 – Your statement period starts
  • 22 August 2015 – You buy some shoes. You have 49 days to pay off the total amount owing to avoid interest
  • 08 September 2015 – You buy a television. You have 32 days to pay off the total amount owing to avoid interest
  • 15 September 2015 – Your statements period ends. You have an extra 25 days to pay off the total amount owing to avoid interest
  • 10 October 2015 – Your payment is due. Pay the total amount owing by the due date to avoid interest
  • 15 October 2015 – If your payment is late, interest will be charged from the date of each purchase and a late payment fee may apply

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