Interest-Free Period

A defined period during which no interest is charged on a balance or purchase. Common on credit cards and some buy-now-pay-later products, interest-free periods are a useful way to spread the cost of purchases without paying interest — but only if the balance is repaid in full before the period ends. After the promotional period, standard interest rates apply, often at high rates.

A credit card offers 0% on purchases for 12 months. If you spend £1,200 and repay £100 per month, you pay no interest at all.

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