Warning over credit card interest-free days
CREDIT card holders are being urged to check the interest-free days offered on their cards to avoid getting stung by fine print.
While the most common number of interest-free days is 55, several big banks now have credit cards with 44 days, and a new analysis by comparison website RateCity has found that interest-free days on offer range from zero to 62.
RateCity spokeswoman Sally Tindall said the seemingly straightforward perk had some big traps.
“Don’t assume your card has interest-free days. There are five credit cards on the market that have none, which means you’ll be paying interest from day one,” Ms Tindall said.
She said if people had money owing on their card their interest-free days would disappear, and taking money out at an ATM was classified as a cash advance that was charged interest straight away.
“One of the biggest traps customers fall into is repaying the minimum balance thinking that’s enough. Not only will you lose your interest-free days, you’ll also pay through the nose in interest,” she said.
“The only way to avoid interest on your credit card is to pay the total every month.”
Beyond Bank Australia general manager customer experience Nick May said consumers should check their card’s terms and conditions.
“The most common mistake people make is missing the words ‘up to’. It’s not always the same number of days interest free for every transaction.”