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Published August 1, 2023

Are There Zero-Interest and Interest-Free Credit Cards?

Interest-free credit cards include lifetime zero interest credit cards and options with 0% promo periods on balance transfers and purchases.

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Credit card interest is calculated on purchases, balance transfers and cash advances, and a high rate of interest can quickly cause your balance to spiral out of control. Some consumers prefer to stick with interest-free and zero-interest credit cards to avoid interest charges and debt.

What are interest-free credit cards?

Interest-free credit cards are cards that do not charge interest on purchases, balance transfers or both. This 0% interest rate benefit could be due to a promotion only available for a limited time or an ongoing feature of a lifetime zero-interest credit card.

Interest-free credit cards vs interest-free days

Interest-free credit cards shouldn’t be confused with the interest-free period that comes with many traditional credit cards that do charge interest. This period is a window of time, usually 44 or 55 days, where no interest is levied on the new purchases made. It’s a helpful perk that will continue as long as you pay your entire balance by the due date on every statement.

Types of interest-free credit cards in Australia

There are many different types of credit cards, but there are only two main varieties of no-interest credit cards:

  1. Credit cards with interest-free promotional offers
  2. Lifetime zero-interest credit cards.

Cards with interest-free introductory offers

Traditional credit cards that normally charge interest sometimes feature promotional 0% interest rate offers. These promotional periods offered by lenders are only available for a set time — usually 36 months or less — once the card is activated. The promotional 0% interest rate is also generally applied to either balance transfers or purchases.

0% balance transfer offers

Zero-per cent balance transfer offers are found on balance transfer credit cards. These offers allow you to transfer an existing credit card balance to a new card, where no interest will be charged on the amount transferred for a period of up to 36 months. So, you’ll still pay interest on new purchases and cash advances.

Once the promotional period ends, the unpaid amount on the balance transfer accrues interest at the revert rate, which is often the card’s purchase or cash advance rate. 

0% purchase rate offers

Cards with 0% purchase rate offers allow you to dodge interest charges on new purchases for up to 24 months. Balance transfers and cash advances will still attract interest.

After the promotional period ends, unpaid purchases will accrue interest at the card’s standard purchase rate.

Lifetime zero-interest credit cards

Lifetime zero-interest credit cards are cards that have an ongoing 0% interest rate, so you’re never charged interest on purchases. Cards like these work similarly to traditional cousins and can be used as an alternative to buy now, pay later (BNPL) plans

How lifetime zero-interest credit cards work

Lifetime zero-interest credit cards don’t charge interest on unpaid balances, but that doesn’t mean they are completely free to use. So, it’s important to understand how these ‘no-frills’ cards work. Common features you can expect from lifetime zero-interest credit cards include:

  • Minimum repayments. Like traditional credit cards, you’ll still make minimum repayments on zero-interest cards.
  • Monthly fees. A flat monthly fee is often charged, though lenders sometimes waive this if you don’t use your card or if you repay the previous month’s statement balance on time.
  • Other fees. You may also need to contend with typical credit card fees, though many have no late payment fees and do not charge international transaction fees
  • Low credit limits. Credit limits are low — up to $3000 — so you must budget appropriately and not exceed this amount.
  • Limited perks. You can anticipate basic perks, like fraud protection features, tap-and-go convenience and digital wallet payments, but don’t expect rewards programs or complimentary insurance.
  • Eligibility. To get a lifetime zero-interest credit card, you must meet the requirements standard when applying for a credit card in Australia. Beyond those basics, you shouldn’t need an exceptional credit score or an extraordinary income to be eligible.

» MORE: How to get a credit card in Australia

Examples of lifetime zero-interest credit cards in Australia

Card options with a lifetime zero-interest period include:

  • NAB StraightUp card
  • CommBank Neo card
  • Westpac Flex card
  • Community First n0w card.

Should you get a lifetime zero-interest credit card?

Lifetime zero-interest credit cards may allow you to stay in control of your debt by giving you the ability to pay off purchases at your own pace without accruing interest. Still, you should weigh the pros and cons and consider alternatives before deciding whether one is right for you.


  • No interest charges.
  • You may not have to pay any fees, depending on how often you use your card and whether you carry a balance.
  • Widely accepted at retailers.


  • Low credit limits may be insufficient for big-ticket items.
  • No flexibility to withdraw cash or make balance transfers.
  • Monthly fees can add up if you use the card frequently — they could cost as much as $264 a year.
  • No access to rewards, frequent flyer programs or the types of special perks typically offered on standard credit cards.

Alternatives to a zero-interest credit card

  • Low-rate credit cards have a purchase rate below 15%. These cards tend to have competitive annual fees, which might work out cheaper than the monthly fees you accumulate on a zero-interest card if you carry a balance. They allow balance transfers and often have higher spending limits.
  • No-annual-fee credit cards have higher interest rates but could be an option if you plan to repay your monthly balance. While they won’t offer rewards and perks, you can transfer balances, withdraw cash and potentially get a bigger credit limit.
  • Student credit cards are regular credit cards suitable for beginners and students. These tend to work like traditional credit cards but are geared towards those getting their first credit card.

About the Author

Kristie Kwok

Kristie Kwok is a personal finance expert and former contributing writer at NerdWallet Australia. She has covered personal and business finance for almost 10 years. She is a qualified chartered…

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