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What is the Interest-Free Period in a Credit Card?

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Created on
March 9, 2023


What’s Inside

One thing that keeps many people from applying for credit cards is the high interest rate they come with.

But did you know there is a credit card interest-free period during which you get the benefit of zero interest? If you know how to use this credit card repayment time optimally, you can use your card for years without incurring any interest charges.

What Does the Interest-Free Period Mean on Credit Cards?

  • Every credit card has a billing cycle lasting 28 to 31 days.
  • The transactions and purchases you make during this cycle will be billed to you at the end of this period. This is when the credit card statement will be issued to you.
  • You will then have around 18 to 25 days to pay your credit card bill without incurring any interest charges thereon.

This duration — from the transaction date to the payment due date — is the credit card interest-free period.

Credit Card Interest-Free Period Explained With An Example

Let’s discuss an example for more clarity.

Say your credit card billing cycle is from August 13 to September 13. Any transactions made during this period will be included in the credit card statement issued on September 13. You will then have time till October 2 to settle the amount due without interest. The bank will levy the credit card interest rate after the due date i.e. October 2.

Here, the period from the transaction date till October 2 is the credit card interest-free period.

How to Use the Credit Card Interest-Free Period Smartly?

The following tips can help you use the credit card interest-free period smartly, so you do not incur any interest at all.

  • Keep track of billing and due dates for your credit card.
  • Cash advances do not have an interest-free period.
  • Be sure to pay your credit card bill in full before the interest-free period ends.
  • Paying only the minimum amount due will waive the late payment fee, but interest will still be charged on the unpaid balance.
  • Any unpaid balance on your credit card will accrue interest, even for new purchases and payments.

Summing Up

This concludes the important details about the credit card interest-free period. Keep in mind that banks levy the credit card interest rate after the due date for making the payment. By paying your dues in full during the interest-free period, you can use your credit card optimally, without incurring any finance charges.

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Frequently Asked Questions

1. What is an interest-free credit card and how is it different from a regular credit card?

There are no interest-free credit cards. However, all credit cards offer an interest-free credit period during which you can repay the dues for that billing cycle without any interest charges.

2. How do credit card companies offer interest-free periods?

Credit card companies can offer interest-free periods because they expect to earn revenue from other sources. The main benefit of credit card interest-free periods for cardholders is that it offers some time to repay the amount due.

3. Are there any hidden fees or charges associated with interest-free credit cards?

There are no interest-free credit cards. However, credit cards offer interest-free periods, and no additional charges are applicable during this duration.

4. What factors should I consider before applying for an interest-free credit card?

No bank or credit card company offers interest-free credit cards. However, before applying for a regular credit card, consider the fees and charges, rewards program, credit limit and the credit card interest-free period.

5. How does the credit card interest-free period work?

Pay your credit card bill in full before the end of the interest-free period to avoid incurring any interest charges.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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