Interest-free credit card deals seem great – buy something now, pay for it later.

But while that may seem cheap, it won’t be if you end up paying interest, or you use the card to buy more than you planned to.

Before you enter into an interest-free deal, consider the steps below.

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Steps to take before getting an interest-free credit card


Make sure you can easily afford the monthly repayments

These deals are only a good deal if you can afford to pay the debt off in the interest-free period. Check that you can comfortably afford the monthly repayments.

If you don’t make the repayments, you’ll be hit with high interest charges.

If you know you’re going to take longer to pay off the debt, consider using a low-interest credit card or not buying the goods.


Set the credit card limit just above the price of the goods you’re buying

A common trap of interest free credit card deals is when you are given a credit card with a higher limit than the value of the goods you’re buying. This is to tempt you to use the card for general use.

For example, if you’re buying a television for $2500 you may get a credit card limit of $8000. To avoid temptation, request the limit be capped at $3000.


Don’t use the credit card for other purchases

Yes it’s tempting – very tempting – to start using the credit card for other purchases, but don’t. Concentrate on repaying the interest-free deal. If you need another credit card, shop around for the best deal.


If you can’t afford the repayments, negotiate a repayment plan

It’s important that you act as soon as you realise you won’t be able to pay your credit card debt. Contact the lender with a request for a payment arrangement based on what you can afford.

Refer to Negotiate payment terms for tips on how to do this.


Our tips

  • Make sure you can afford the repayments
  • Keep to the terms carefully and, if possible, pay extra to make sure the debt for the goods is repaid in the interest-free period
  • Keep the limit on the card as low as possible and don’t use the card for general purchases
  • Paying off the total debt on an interest-free credit card gives you a great sense of satisfaction as you have avoided paying interest

What should I do if?

I get a default notice

A default notice is a letter formally notifying you that you have failed to make a repayment or repayments. For personal loans a default notice giving you at least 30 days notice is required before taking any recovery action against you.

The default notice will tell you what you need to pay. In addition to this amount, you will also need to pay your regular payment within the 30 days.

If you get a default notice, contact your lender to tell them you are in financial hardship. If you cannot agree an affordable repayment arrangement and your lender is threatening legal action call us for advice.

I still don't pay

If you do nothing before the expiry date of the default notice, your debt will be ‘accelerated’. This means you owe the whole debt, not just the payment you are behind on.

Also, the creditor may decide at this point to start legal action against you. If they get a judgment from a court, they can get a court order to have money taken from your wage or take assets such as your car, boat or house. If you’re in this situation, contact us on 1800 007 007.



If you were given a credit card limit you could not reasonably afford at the time the credit card and/or limit increase was granted, the loan may be arguably unjust or unsuitable.

Credit card debt is covered by the National Consumer Credit Protection Act.

This means:

  • You cannot be sent an offer to increase your credit limit unless you opted in to receiving these offers
  • For new credit cards (from 1 January 2019), the lender must assess your ability to pay the credit card within 3 years.
  • If you were given a credit card limit you could not reasonably afford at the time the credit card and/or limit increase was granted, the loan may be arguably unjust or unsuitable
  • Credit providers are legally required to complete a number of steps if they’re trying to commence legal proceedings
  • Credit providers must act reasonably in dealing with your issues. If you are not satisfied, you have a right to dispute resolution