Start looking for a new credit card these days and you’ll probably see more options than on Tinder! But one card group that’s particularly growing right now is the Go Mastercard and no interest credit cards.

If you’re sick of having to pay off additional money on your card because of expensive interest accrual, it’s time to check out three different card types: GO Mastercard, interest-free-offer cards, and the new no interest cards.

Here’s the lowdown on each so you can see which might suit your situation and spending habits.

Explaining these three types of no interest products

GO Mastercard

The GO Mastercard credit card lets cardholders take advantage of long-term interest-free purchases at selected partner retailers within Australia. Some of these partners include Harvey Norman, Joyce Mayne, and Domaine. 

Interest-free periods can be up to 60 months in total, though the timing varies according to the item purchased and how exxy it is. 

The GO gives customers three different repayment plans to choose from, which are equal-payments monthly, minimum-amount monthly, or a flexible plan that leaves payment decisions up to you as the cardholder. 

Interest free offer credit cards

You’ve probably seen ads for or had your own bank send you info on limited-time offers where you can sign up for a card and not have to pay interest for a few months. This is an example of an interest-free-offer credit card. Cardholders get to enjoy paying 0% interest on purchases for a set period.

These credit cards can be used with any retailers or other businesses that accept that type of credit card, whether it’s a Visa, MasterCard, American Express, or another style.

Zero interest credit cards 

The other type of credit card to consider is the always-zero-interest product whereby customers never ever pay any interest rate on their purchases. This option is relatively new in the Australian market, having launched in 2020. 

There are no timeframes to worry about for this availability. However, there are smaller spending limits, generally only up to $3,000 maximum per card.

Have you used Afterpay or Zip in the last year or two to buy a cool new outfit or a new mobile? If so, think of these credit cards as the banks’ alternatives to those services. Like interest-free-offer cards, they can be used pretty much anywhere.

 

The nitty gritty details: GO Mastercard

Available from Latitude Financial Australia, the GO Mastercard is for people looking to pay off retail purchases over a decent amount of time without having to factor in interest costs.

While customers can use the card like other Mastercard products at any place that accepts credit cards, general transactions don’t benefit from the special interest-free term unless its transactions with GO retail partners. 

Deets you should know

For charges made at non-partners, you’ll get up to 55 days’ interest-free. You’ll then pay an interest rate of 19.95% per annum on the balance if you don’t pay the card off within the statement period.

There aren’t any annual fees to pay for this credit card, but there is an $8.95 monthly charge incurred for those months when the card's balance exceeds $10. 

What differentiates this Mastercard from other products is that cardholders get to choose from three different repayment plans, an equal monthly plan, a minimum monthly plan, and a flexible plan.

Regardless of which out of the three you choose, if you’re unable to pay off the balance on your card by the time the promotional interest-free period is up, interest comes back into play at  25.90% per annum.

Note, too, that there’s a $30 late payment fee for cardholders who choose a plan that requires a monthly payment and fall behind a payment. 

How to pay up

These repayment plans differ in areas such as the number of interest-free months available, the type of purchases the scheme is available for, and the minimum item cost. 

The equal monthly plan is generally only available for minimum purchases of $1,000 and involves paying off a set, equal amount each month for the pre-determined interest-free period. Terms and additional offers also vary over time with this setup, so keep an eye out for updates and new promotions. As an example, though, in November 2020, cardholders who purchased a product from selected retailers that cost between $1,000 and $10,000 received a bonus store gift card of between $100 and $500. 

The minimum monthly plan is the more traditional route. Customers must make the minimum repayment amount each month for the term of the period (from six months upwards). Want to pay extra to pay off the balance sooner? Go for it! The minimum purchase required for this plan is generally $300.

The flexible plan is, as the name suggests, very relaxed. Cardholders decide whether or not they want to make payments each month during the interest-free offer period, and if so, how much. (So, if you have a bit of a budget blowout after Christmas and New Year’s or have to suddenly pay for exxy car repairs, there’s less need to stress that month.) Plans start from three months, and the minimum purchase amount is usually $300. Users can wait until the last day of the interest-free period and pay off the entire balance then, or make payments over the period, depending on what works for them at the time. 

Pros and cons of the GO Mastercard

ProsCons
Long term interest free offers (up to 60 months)Interest-free offers available to specific retailers only
Flexible repayment plan optionsHigh interest rate of 25.90% p.a. on remaining balances
Monthly fee waived when balance is $10 or lessPurchase rate of 19.95% p.a. for purchases at non-partner retailers
$8.95 monthly fee (only when balance is above $10)
$30 late payment fee

The nitty gritty details: Interest free offer credit cards

Interest-free-offer credit cards are more traditional products. Financial institutions such as Commonwealth Bank, Westpac, NAB, ANZ, and American Express enable cardholders to take advantage of a limited-time 0%-interest offer. 

Deets you should know

The interest-free period may be six months, a year, or even up to 17 months, depending on the provider and the promotion. Many banks make these offers available only to new customers signing up for the credit card for the first time. Always check terms and conditions for the fine print. 

These cards are popular because they’re accepted anywhere, not just at selected retailers, and they don’t involve having to spend minimum amounts per transaction, either. This flexibility gives cardholders more buying options. 

As for fees, these vary from card to card. Most have an annual fee, but not all, so you might pay $0 or up to $100, for instance, to be a cardholder. Keep an eye out for related promotions, though. Many banks have a combined no-annual fee offer or waive the annual fee when cardholders spend a predetermined minimum amount every year. 

Happily, many interest-free-offer credit cards come with additional perks. For example, you’ll find cards with benefits such as rewards points as you spend or the accrual of frequent flyer points, as well as travel insurance, purchase protection on the goods you buy, or a helpful concierge service.

How to pay up

Most financial organisations have the condition that the account has to be kept in good standing for the interest-free offer to continue the whole period. Cardholders must continue making the full minimum repayment monthly, on time, to ensure the interest-free promotion doesn’t get withdrawn.  

If you’re worried about paying off interest once the interest-free offer period finishes, be on the lookout for credit cards that also charge low interest rates on balances. For example, some offer rates of between 11% and 20% per annum. 

Pros and cons of interest free offer credit cards

ProsCons
Mid-term interest free offers (up to 17 months)Must maintain minimum repayments to keep offer
Interest-free at any retailerLate payment fees of up to $30
No nnual fee options available
Low purchase rates
Earn rewards points
Get more extra benefits

The nitty gritty details: No interest credit cards

Launched in the Australian market in 2020, no interest credit cards are products that mean customers never have to worry about accumulating or paying interest.

Zero interest cards are designed to give bank customers an option for avoiding interest on purchases without the need to use the popular “buy now, pay later” services such as Afterpay and Zip. 

Two examples of no interest credit cards are the NAB StraightUp card and Commonwealth Bank's Neo card. Keep an eye out for new products launching over time, as other banks will probably follow suit.

Deets you should know

No interest credit cards provide interest-free transactions for the term you have your card and therefore forgo promotional end dates. However, there are still some restrictions on how the cards can be used, with limits on total spending one of the main ones. 

For example, with the NAB StraightUp Visa card, there are three different credit limits to choose from: $1,000, $2,000, or $3,000. As such, you can use the card for several smaller purchases or one higher-priced piece, but the $3,000 maximum won’t stretch for many large purchases.

Monthly fees come into play for this NAB Visa card, too. They vary for each credit limit, moving from $10, to $15, to $20 at the most. However, NAB reverses these charges if you carry a balance or complete a purchase transaction during the statement period. 

How to pay up

Customers must pay a minimum monthly account off their balance. The Straightup card's monthly minimum is $35 for the $1000 card limit, $75 for the $2,000 card limit, and $110 for the $3,000 card limit, although cardholders can pay more each month if they want to. As you’d imagine, if balances are less than the minimum monthly payments due, users need only pay off the balance amount. 

What's cool is if you miss a repayment, you won’t actually get charged penalty fees. This perk is handy for people with irregular income, although everyone should use credit cards responsibly to avoid getting themselves into tricky financial spots.

Pros and cons of no interest credit cards

ProsCons
No interest for everCredit limit max up to $3,000
No late payment feesMonthly fees (but only when card is being used)
No foreign transaction feesVery few extra benefits

Which Credit Card Type Wins in Different Scenarios?

Still not sure which credit card is best for you? Here are some common customer goals and the Kredmo opinion for which card works best to satisfy each:

  Are you looking for a long-term interest-free offer from retailers such as Harvey Norman, Domayne, or Joyce Mayne so you can buy that expensive leather couch you’ve been eyeing off? 

    If so, the Go Mastercard is our winner.

  Do you want to avoid paying interest on purchases but also want to enjoy low or no annual fees? 

    Your best bet is an interest-free offer on a traditional credit card or a no-interest credit card.  

  Need interest-free functionality with a decent credit limit you can use at any store you like? 

    A traditional credit card with an interest-free offer will come up trumps.

•  Want to pay zero interest forever, even if it takes you a while to pay off your balance? 

    Choose an always-no-interest credit card.

•  Want to earn frequent flyer points? 

    Start researching traditional interest-free-offer credit cards. 

•  Looking to build up rewards points to redeem for gift cards, products, and more?

    An interest-free-offer credit card with rewards should suit nicely.

•  Want a card that boasts no foreign transaction fees

    Opt for an interest-free offer on a traditional card or select a no-interest-ever card. 

•  Don’t want to pay late payment fees? 

    Apply for a no-interest credit card, such as the NAB StraightUp Visa. 

•  Wish you only had to pay a monthly amount when you actually use your card? 

    Infrequent credit card users should consider the Go MasterCard or a zero-interest credit card.

 

A Final Word

Saying goodbye to hefty interest charges is exciting, but always use a credit card responsibly. No matter which interest-free card you choose, don’t spend beyond your means. Eventually, the money always has to be paid back!

When selecting a credit card, first think about how much you’ll likely be spending on transactions monthly. Then, find a product with term and payment conditions that give you a reasonable amount of time to pay off the balance, as suits your means. 

Set yourself a goal to pay down the balance on your card before any zero-interest period ends. This way, you’ll avoid getting slugged with higher interest rates down the track.  

 

Looking for more Australian credit card tips? Check out these Kredmo articles for further helpful hints:

Top Interest-Free Credit Card Offers

NAB StraightUp vs Commbank Neo: No Interest Credit Cards

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