Naive newbie question re. interest-free period

chal

Hi,

I have a question regarding interest-free periods when buying things on credit cards.

If I have a credit card with an up-to 57 day interest-free period, what does that actually mean in terms of paying back?

Example:
On day 1 I buy something costing £50
On day 20 I buy something costing £50

Does this mean on day 57 i have to have paid back £50 (the first item), or £100 (both items) because they were both bought within the same month?

Thanks,
Steve

Clariman

Hi chal

57 days is the maximum interest free period. For example, let's say your February statement was printed today (29th Feb) and you bought something tomorrow. That item wouldn't appear on your credit card statement until next month (29th March). Your March statement would have a "pay by date" marked on it which might be, for example, 3 weeks later. If you paid the balance off in full by that date, you would not be charged interest on the purchase you make tomorrow, giving you 30 days plus 21 days interest free i.e. 51 days.

OTOH if you bought something yesterday, then it might have appeared on your statement today and you would have to pay it off 3 weeks from now i.e. you would only get 21 days interest free.

Very important note! With most credit cards, your purchases are only interest free if you pay off the balance in full each month. If you don't clear the balance each month you will probably get charged interest from the date of any purchase.

Clairman

chal

Hi,

thanks for the info.

I've just applied for a cashback credit card and I'm planning to use it in place of my debit card but pay off the balance every few days. I have no intention of actually running up debt on the thing, I just wanted this point clarified because the notes on the application aren't particularly clear.

Thanks!

Clariman

You don't need to pay it off every few days. Just pay it off in full every month by the due date on the statement and you'll not be charged any interest.