What is an interest-free period?

An interest-free period is the amount of time between the date you make a purchase on a credit card, and the date your bill is due. If you pay off the balance during this time and you won’t be charged interest. If you don't pay it off on time, then you’ll pay interest on the whole balance.

8 min read
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How long is the interest-free period?

Check with your credit card provider how long your interest-free period lasts. It’s usually around 56 days and depends on when you made your transactions. This gives you time to get your bill for the month and then pay it off.

Some credit card providers offer a longer 0% interest period as part of an introductory offer or promotional deal. This can be useful if you're:

  • planning to use the credit card to consolidate your debts
  • going to make a large purchase and want to spread the payments without spending too much on interest

You should try to clear as much of your balance as soon as you can. That way you’ll keep the interest to a minimum when the promotional deal ends.

How can I benefit from an interest-free period?

Interest-free periods mean it’s possible to spend on a credit card for free – as long as you pay off your balance within the offer period.

You’ll be able to save money without damaging your credit history this way.

When spending on a credit card, it’s important to make at least the minimum repayment on time every month. If you don’t:

  • any promotional offers you have could stop
  • you could be charged by your lender
  • your credit history will be damaged

Ideally, it’s best to make more than the minimum repayment each month. That way, you reduce the amount you pay in interest.

What other types of credit cards offer interest-free periods?

All credit cards come with a standard interest-free period, but some come with a promotional interest-free period. It’s important you understand the differences between them.

Promotional interest-free period on purchases

This is typically offered to new customers as an incentive. There’s quite a lot of competition between credit card providers to offer the best interest-free periods, so you can expect to find some cards offering 0% for upwards of 12 months, with some as high as 24 or 25 months. The one you qualify for will come down to your credit history and income.

With a promotional interest-free period, you won’t have to pay interest on any purchases you make within the time specified. You’ll still have to make at least the minimum repayment each month, but you won’t need to worry about accumulating interest until the promotional period ends.

Promotional interest-free period on balance transfers

A balance transfer card is designed to simplify your existing debts and potentially make them more affordable. This might be suitable if you have a few credit cards and a personal loan.

If you’re finding it hard to keep track of all your balances and bills, you can use a balance transfer card to clear these. It will leave you with just one payment to make each month. And because some of these cards come with a promotional interest-free period, they might even make your monthly payments more affordable. However, be aware that there is often a fee to transfer your balances over.

It’s a good idea to clear your balance – or as much of it as you can – before the 0% interest period ends so you can avoid paying interest altogether. If you don’t manage this, providing you haven’t missed any of your monthly payments, you could start shopping around for a similar 0% balance transfer deal and shift your remaining balance onto this.

When to get a credit card

While you may be able to get a credit card that lets you make purchases without charging you interest, you’ll always pay interest when you use the card to withdraw money from a cash machine. That’s why it’s best to avoid this altogether, as it could also negatively affect your credit history.

Note, you’ll also have to pay interest if you use your card to take out foreign currency.

Taking out a credit card to help with everyday expenses

If you’re struggling to afford some of your everyday living expenses, it can be tempting to take out a credit card to help you afford these. Your living expenses can include things like:

  • rent
  • food shopping
  • mortgage repayments.

If you’re unable to afford these living costs with your income alone, taking on credit could make your situation more difficult. This is because you'll then need to pay your credit bill each month as well.

We understand how worrying it can be when you’re struggling to afford food or make your rent or mortgage payments on time. If you need help, you can seek out financial advice and find out more about your options by contacting the Money Advice Service.

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