How to calculate the interest free period on your credit card

couple reading finance report

A credit card is an important financial tool for most Australians but using it responsibly is easier said than done. For those looking to get on top of their personal finances, learning how to live interest free is a great place to start. 

A credit card can be a handy option for those looking for ways to stump up large one-off costs. 

But whether you’re buying a couch, coffee machine, or a treadmill one question always comes up – what sort of interest will you be charged?

For people wanting to pay off their balance gradually, without the stress of paying interest, a credit card with a long interest free period can help manage repayments.

What does it mean to be interest free?

It’s a phrase that’s attached to almost every credit card, “interest free” but what does it actually mean?

Think of it as a grace period. It’s the number of days you have to pay off your purchase before you get charged extra interest fees which can range from 20% to 30% of the original price. 

Most credit cards tend to provide an interest free period that runs for a maximum of 44 to 55 days, but then there are some that go above and beyond the standard offer.

For humm90 cardholders the interest free period is double the typical offer made by other cards with up to 110 days interest free.

But how can you calculate repayments so that you avoid getting charged interest?

Calculating your interest free period

To use your credit card with confidence, you need to learn how to calculate your interest free period. 

When you take home a newly-purchased outdoor bbq or book your tickets overseas, you should plan how you’ll repay the balance before the interest free period ends on your credit card.  

The first step is understanding your monthly statement cycle. For most credit cards your interest free period starts on the first day of your statement cycle. If you buy your outdoor bbq on this day you’ll have the entire interest free period to pay back the balance without getting charged interest.

But how long that period lasts, whether it’s 44, 55, or 110 days depends on your card. 

For humm90 cardholders the beauty of 110 days interest free is that even for purchases made on the last day of your statement cycle, you will still be entitled to 79 days interest free. That means you will get almost double the interest free term of most other cards even if you leave your purchase to the last minute. 

To help cardholders manage their repayments responsibly, the humm90 calculator runs the numbers to figure out how much you owe and how often you’ll need to make repayments before the interest free period ends.

The breathing space that comes with a long interest free credit card puts control back in your hands. 

Control your credit card today, and live life interest free with humm90.