Do you apply for credit cards without worrying too much about the interest rates? If you always take advantage of interest free days you might — you would avoid interest payments altogether, regardless of the interest rate. But did you know that you might not always be eligible for interest free days?

Here are some situations where interest free days might not apply, or where you might receive fewer interest free days than expected:

1. You don’t pay off your balance in full each month.

If you have a credit card offering interest free days (like the HSBC Gold Visa), chances are very good that your interest free days only apply if your entire balance was paid off during the last statement period. In other words, if you didn’t pay off your full bill last month your new purchases this month won’t be eligible for that grace period before interest starts to accumulate.

2. You have a balance transfer on the credit card.

If you initiated a balance transfer from another credit card, you probably didn’t do that intending to pay off the full balance transfer amount right away. If you thought you could have a balance transfer on the account and still get interest free days on purchases, you might be in for a surprise. Your credit card (e.g. St George Vertigo) requires you to pay off your entire balance to be eligible for interest free days the following statement period — that can include your transferred balance.

Also keep in mind that balance transfer amounts won’t typically be eligible for interest free days of their own. The card’s balance transfer offer (if it has one, like the IMB Rewards credit card’s offer of 3.9% p.a. on balance transfers for 12 months) will apply to your balance transfer — not the interest free days policy.

3. You took out a cash advance.

Just as balance transfers aren’t generally covered by interest free days, neither are cash advances (or purchases used like cash advances, such as buying traveller’s cheques).

4. You made a purchase at the end of your statement period.

If you want to maintain your eligibility for interest free days in the future, you have to pay off your current bill each month. That means if you make a purchase just before the end of your statement period, you’ll have to pay it off before that statement period ends (which might just be a day or two) to maintain your “up to 55 days” or “up to 44 days” interest free on your credit card purchases the following month. Therefore you have to be careful about timing. If you’re not, you might find yourself with fewer interest free days than you expected.

Interest free days make things like rewards cards very appealing to consumers (because you get interest-free purchases and earn rewards in the process). However, you need to understand their limitations. Never assume that your purchases will be interest free.