{"menuItems":[{"label":"What does interest-free days mean?","anchorName":"#mark1"},{"label":"Compare 25 days interest-free credit cards","anchorName":"#mark3"},{"label":"What else do I need to know when using a credit card with interest-free days?","anchorName":"#mark5"},{"label":"Frequently asked questions about credit card interest-free periods","anchorName":"#frequently-asked-questions-about-credit-card-interest-free-periods"}]}
You can use a credit card with interest-free days to make purchases without being charged interest for a set period of time in your billing cycle. To make use of this interest-free period, you usually have to pay your credit card balance in full by the due date on your statement. Use this guide to find answers to the most common questions about interest-free days, compare credit cards with up to 25 days interest-free and learn about the key factors to be aware of when using an interest-free card.
What does interest-free days mean?
This term refers to a period of time in your credit card billing cycle when you can make purchases without being charged interest. Interest-free days begin on the first day of your statement period and end on the payment due date. For example, if you made a purchase on day 1 of a statement period, you could have 25 days to pay it off before interest is applied to the balance. A purchase made on the second day of that statement period would get 24 days interest-free.
Other key definitions you need to know
When you’re learning about interest-free days, you’ll often come across a number of other terms that relate to this feature. Here are 3 major ones to take note of:
Statement period/billing cycle. The statement period usually runs for 30 days, or from when your last statement was issued to when the next one is issued.
Statement issue date. This is the date on which the bank issues your monthly credit card statement.
Payment due date. The date by which you must pay the balance to avoid late charges/fees. If you want to get interest-free days, you’ll usually have to pay your full balance by this date.
Purchase rate. The interest rate charged on purchases. Interest-free days help you avoid this cost.
How do I receive interest-free days?
To be eligible to receive interest-free days, you must repay your account’s outstanding balance in full by the due date on your statement. Usually, you’ll need to pay the full balance for the statement prior to the start of that billing cycle as well as the statement issued at the end of it.
Why does it always say “up to 25 days”?
The number of interest-free days available varies depending on what day of your billing cycle you make the purchase. While you would get 25 days interest-free on purchases made on the first day of the billing cycle, you’d get 22 on the second day and only 1 day interest-free if you made a purchase the day before your statement was issued for that billing period. So “up to” is used to refer to the maximum amount of days you can get interest-free in your billing period.
Compare 25 days interest-free credit cards
1 - 11 of 11
What else do I need to know when using a credit card with interest-free days?
You can use a credit card with interest-free days to save on your account costs when you meet specific requirements. Here are the key details to keep in mind so you can make use of your interest-free days:
Minimum monthly payments. You usually can’t get interest-free days for purchases if you only pay the minimum amount required on your statement, as most credit cards only offer this benefit when you pay your balance in full by the due date.
Eligible purchases. Interest-free days are only available for “eligible purchases” made on your card. While this usually includes everyday spending at the supermarket, petrol station, restaurants and so on, exclusions typically apply for cash advance transactions, government payments and some bill payments. Check with your credit card provider for details on what is considered an “eligible purchase” for your card.
Dates vary. Don’t expect all your credit cards to come with similar billing cycle dates and due dates. These dates can vary from one card to the next, even when issued by the same card issuer.
Balance transfers. Usually, if you have a debt on your credit card from a balance transfer, you won’t be eligible for interest-free days on new purchases. If you want to transfer a balance and make purchases without interest, you could also consider a card with an introductory rate of 0% for purchases and balance transfers.
Example: Making use of interest-free days
Let’s assume you have a credit card that offers 25 interest-free days and its billing cycle begins on the 1st of each month and ends on the 20th. Given the 25 interest-free days, the due date on your credit card statement would be the 25th day of the month. So if you were making purchases in June, here’s how it would look:
1 June. First day of the statement
20 June. Last day of the statement
25 June. Due date of your payment for June
In this case, the 25 interest-free days begin on 1 June and end on 25 June when your payment is due. So here’s how your interest-free period would work as you make purchases throughout the month:
You make a $200 purchase on 1 June. You don’t have to pay any interest towards this purchase until 25 June, which gives you 25 interest-free days.
You make a $100 purchase on 20 June. This is the last day of your billing cycle, but you don’t have to pay any interest towards the purchase until 25 June. This means you get 3 interest-free days.
When your statement is issued for June, you’ll owe $350. So as long as you pay this in full by 25 June, you won’t be charged interest on your purchases and can continue to enjoy interest-free days for the next billing cycle.
* This is a fictional, but realistic, example.
How do interest-free days work?
Interest-free days can be tricky to visualise, so you can see this handy diagram to understand how it works. As well as showing the interest-free period (in green), we also show when purchases are made, when the statement is issued and what happens if you pay less than the full amount for a billing cycle (the middle one in this case).
Credit cards that come with 25 interest-free days give you the ability to make purchases and not pay any interest towards them as long as you make timely repayments. Such cards can come with a number of other features as well, so it’s important that you choose a card as per your requirement. Bear in mind that just about every credit card issuer provides cards with interest-free days on purchases, so it is in your best interest to compare as many as possible before making a decision.
Frequently asked questions about credit card interest-free periods
With Singapore credit cards that offer interest-free days, the maximum interest-free days you can take advantage of usually vary between 20 and 25, depending on the card you use.
Additional cards linked to your primary card follow the same billing cycle as the primary card and offer just as many interest-free days on purchases.
Once you start paying your account’s closing balance in full each month again, you can start making use of interest-free days on purchases.
If you pay off your credit card balance in full by the due date each month, a card with interest-free days will allow you to make purchases without paying interest. This could be ideal if you use a credit card to earn rewards or for short-term cash flow such as spending between monthly paydays. But if you think you might not be able to pay the account’s closing balance in full each month, you may like to consider low interest rate credit cards and 0% purchase offer credit cards.
Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. She's also one half of the Pocket Money podcast. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone. Sally has a first-class Honours degree in Communications and Media Studies (majoring in Journalism and Professional Writing) from the University of Wollongong.
When it comes to big-ticket items, here’s how a credit card could work for you.
Feedback
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
