Can you afford interest-free?

Interest-free deals can be tempting, but failing to pay back what you owe in the agreed period could be costly. So, how much do these deals actually set you back?

In 2012 alone, 95,000 Australians purchased goods on an interest-free deal, with more than half (52 per cent) of these sales for more than $2500. Consumers often get caught out by only paying the minimum each month, which isn’t enough to clear the balance, which means that after the agreed period is up, the amount remaining could attract as much as 28 per cent interest per annum. Many of the providers of interest-free credit also charge monthly fees, so if you’re making payments over an extended period of time, these can add up to a substantial amount. has a new calculator which enables you to work out how much you must pay each month to clear the balance within the agreed time frame.

Top tips on interest-free deals.

  • Ask yourself honestly: If you can’t afford to pay for it now, can you really afford to buy it at all? And will the monthly repayment amount always be realistically affordable?
  • Check if monthly account fees, late payment fees and early repayment fees will be applied to your account.
  • Look for cheaper alternatives such as lay-by.
  • If you opt for a ‘Buy now, pay later’ option and make no payments, you will be charged a high rate of interest unless you clear the balance by the agreed due date.
  • If you’re issued with a card to accompany your account, check the conditions for further purchases or cash advances. These may not be included in the interest-free option and could attract high rates of interest.


For further details and to use the interest-free calculator, visit

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