What are my credit cards' interest free days?

I have a 56 day interest free period on my credit card. Does that mean I have to pay the whole balance off before my statement is due or can I pay when I receive my statement?

Simply, this means you would need to pay the full balance within around 25 days after the end of the statement - so you'd have time to receive the statement and then make a full payment.

A period to repay the balance in full

To avoid paying interest, any outstanding balance must be paid off on or before the last day of a credit card's interest free period (commonly before the 56th day).

To make this clear let's imagine that a card statement starts on the 1st of January and runs up until the 31st of January. The credit card bill will be due on the 25th of February.

Paying off the outstanding balance before the 25th of February will simply require paying off the full amount owed on the statement - so any transactions credited to the account up to 31st January.

Clearing the statement balance in full by the due date (25th Feb in this example) means those purchases credited to the account during the statement period (1st - 31st Jan) will then not be charged any interest.

Small complications

However, it can be a little more complicated than that as interest free periods generally require the previous month's statement balance to have been paid off in full by that statement's due date as well.

When the balance isn't repaid in full

If the credit card statement isn't paid off in full, interest will be charged from the day of each transaction until repayment of a particular amount is made (see our article on how payments are allocated for more on this though).

For example, if you pay back £10 of a balance owing £100, you'll only be charged interest on £90 once the £10 is credited onto your account (e.g. you don't have to clear particular purchase amounts in full to reduce interest).

What isn't included in the interest free period

Additionally of course, interest free periods generally only apply to purchases - so any cash transaction or balance transfer will still incur interest charges.

Transactions classed as cash transactions (and balance transfers outside of 0% periods) will start accruing interest from the moment you take cash from an ATM or buy foreign currency, one of the many reasons to avoid doing either with your credit card.

You can see which transactions are included in your interest free period in your credit card terms and conditions - some, while not many, do include cash transactions for example.

How long you have to pay in full

The up to 56 interest free days are always for a fixed period and effectively mean 25-26 days after the last day of the statement a full payment is required in order to avoid interest on purchases.

A common misconception is that each purchase gets its own 56 days without interest.

That's not the case. In the example above, a purchase made on the 15th would get 41 days and a purchase made on the 30th would get 26 days.

Additionally of course, not all credit cards offer up to 56 days - some offer much shorter periods than this and only allow 14 days (a 45 day interest free period) for example after the statement to pay it back in full - so check individual credit card terms for exact periods.

Paying on time

Complicating the issue slightly is the question of how you pay your credit card bill.

Any payment is unlikely to be instant, and in fact banks are well known for ensuring they're not, so it's vital that the payment reaches your credit card provider in good time.

A good rule of thumb is to be over cautious and send payment a week in advance. Of course this does depend on how you pay, paying by cheque will require much longer to be delivered and processed than paying online or transferring money between accounts in the same bank for example.

Ensuring you never pay interest

There are two relatively simple ways to ensure you never pay interest on a credit card:

1. Only ever use the credit card for purchases: that is goods or services from retailers or companies. Transactions to avoid include withdrawing money at the ATM, buying foreign currency or traveller's cheques, gambling including online and at a casino (including food and drink), money transfers and buying shopping vouchers (sometimes).
2. Set up a direct debit to repay the whole balance: while it's not always logistically helpful to be automatically clearing a credit card in full each month - it is certainly a way to help ensure you don't over spend on credit and to help avoid ever forgetting a repayment as well. It is a sensible approach when using reward or cash back credit cards for example.

0% interest free period offers

Not to be confused with 'introductory' interest free periods, also known as 0% purchase deals, which offer 0% interest on purchases for an introductory period - with the leading deals offering up to 15 months or so.

These deals work differently, as the interest rate is 0% as opposed to a full payment waiving the charges of a standard interest rate.

With introductory interest free periods, the payment requirement to avoid interest during the 0% period is only the minimum monthly repayment.

However, it's always a good idea to pay more than this of course in order to clear any transactions before the promotional period ends and the standard interest rate starts to apply.

In terms of standard interest free periods and when interest begins, we've covered in more detail what happens at the end of a 0% period here.

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