No one likes to pay interest to their credit card company. That’s what makes the concept of interest free days so appealing — if you pay off your previous balance in full, you might get some interest free time to pay off new purchases. Awesome. But do you really understand how interest free days work? Do you know how many interest free days you really have on your purchases?

Let’s take a look at how interest free days are advertised in credit card offers, and what those interest free days really mean.

How Interest Free Days are Advertised

Interest free days can vary from one credit card company to another. But they’re often in the 44 – 55 day range. There are exceptions of course. For example the Suncorp Standard Visa is a rare exception where no interest free days are offered, and the Coles Group Source MasterCard offers up to 62 days — higher than usual.

And there’s your key phrase — “up to.”  It’s unlikely you’ll ever see interest free days advertised without it saying something like “up to 45 days” or “up to 55 days” interest free. It’s important to understand that means the advertised interest free period is the maximum time you can get interest free on new purchases. It does not mean you’ll always get that much time interest free before you have to pay the bill.

Why Interest Free Days Vary

The reason your actual interest free days vary from purchase to purchase is that you’re making those purchases at different times during your statement cycle. There’s a common condition to interest free days — you have to pay off your entire balance at the previous statement period’s due date to be eligible for them. If you do, you’ll have “up to” X amount of interest free days during the next statement period.

Let’s look at an example.

We’ll say you have a monthly statement cycle and your payments are due the last day of the month. You pay off June’s balance in full before the end of that month and you make two new purchases in July — on the 1st and 20th. You get interest free days on both of those purchases, but only until your next statement comes and your payment is due. You would have to pay off both purchases at that point to get interest free days on new purchases in August.

That means you’ll technically have the whole month interest free for the purchase made on 1 July, but you’ll only get around eleven interest free days on the later purchase because it still also has to be paid off at the end of the month.

If you plan to take advantage of interest free days for a few weeks on a specific purchase, it’s important that you understand how this works. Otherwise you risk having a payment due in full sooner than you think (or being stuck with interest charges). Plan these purchases carefully, making them soon after paying your previous balance whenever possible.