In­ter­est free daze

Credit card users are count­ing down the days, writes

Townsville Bulletin - - NEWS -

An­thony Keane

CREDIT card hold­ers are be­ing urged to check the in­ter­est- free days of­fered by 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 a few 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.

Con­sumers should find out how many in­ter­est- free days they had and how that worked with their monthly state­ment cy­cle, she said. “Say you have a 55- day in­ter­est- free card. On day one of your state­ment cy­cle you’ll get 55 days, but on day 30 you’ll only get 25.”

Ms Tin­dall 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 is one of just four lenders of­fer­ing up to 62 days in­ter­est­free on credit cards, and its gen­eral man­ager cus­tomer ex­pe­ri­ence Nick May said con­sumers should check their card’s terms and con­di­tions to make sure their cur­rent deal worked for them. “There are lots of mov­ing parts and credit cards are highly com­pet­i­tive prod­ucts,” he said.

“The most com­mon mis­take peo­ple make is miss­ing the words ‘ up to’.

“Most credit card pay­ments are due at the end of a cy­cle, usu­ally in line with a state­ment, so it’s not al­ways the same num­ber of days in­ter­est- free for ev­ery trans­ac­tion – it de­pends on when you made the pur­chase as to how many in­ter­est- free days you will re­ceive for that trans­ac­tion.”

Mr May said peo­ple should take ad­van­tage of tech­nol­ogy to be or­gan­ised. “Whether it be set­ting your­self a re­minder in your di­ary or cal­en­dar or, even bet­ter, set­ting up a reg­u­lar pay­ment so that the pay­ment to the card hap­pens au­to­mat­i­cally each month – it’s set and for­get,” he said.

“The pay­ment will al­ways be due at the same time, so there’s no ex­cuse.”

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