Having an interest free credit card can give you access to days where you will make a purchase and you won’t be charged interest for it. It is a nifty piece of plastic that can help people manage their finances, especially if they will be using the card to make important purchases. But to make the most of your card there are a few things that you need to know.
What are interest free days?
Knowing how an interest free credit card works is essential to making the most of it. Most credit cards give cardholders anything between 44 to 55 days in interest free days. The catch to mastering your interest free credit card is that you need to pay your closing balance in full at the end of each month.
How is it calculated?
Each statement period usually runs for about 30 days and has 25 days from when your statement period finishes to the payment due date. This will make 55 days of when the interest-free period will be effective. However, there are some cards that offer a minimum number of interest free days which go up to 25 days. Depending on when your statement period begins this will affect the number of days.
For example: If your statement period begins in 1st date of the month, and the last day of statement is on the 30th, then your due date for payment will be on 25th. This will give you access to 55 interest free dates which will be effective on 1st and end on the 25th when your payment is due.
Why get an interest free credit card?
An interest free credit card tends to be handy for people who are in a tight squeeze financially or people who need to make important purchases without attracting a hefty interest rate. The card can essential help people manage to spread the costs of a large purchase over several months or for as long as the
interest free days allow them to. However, it is vital that you check the fine print so that you do not break the terms of the card.
How can I make it work for me?
An interest free credit card can be useful if used correctly. But if you not used correctly and your card has late payments you could end up paying high fees. What you can do is:
- Pay out your balances in full in each month
- Make eligible purchase according to the card and avoid making cash advance transactions
- Have your payments automated so that you don’t skip making a payment
- Budget around the card for bigger payments so that you give yourself time to pay it off
Before you take out an interest free credit card it is vital that you assess whether you will be able to pay off all balances before the interest free period ends and reverts to a higher interest rate