Best interest-free credit cards

What is an interest free credit card?

An interest free credit card is one that charges zero interest on purchases for an extended period. This 0% interest period can range from 3 months to as long as 2 or 3 years, depending on the card and where the purchase is made.

If you pay off the purchase during this interest-free period, you won’t be charged any interest. However, these types of credit cards usually come with an annual fee and establishment free.

How interest-free credit cards work

This type of credit card offers 0% interest on purchases in 2 ways. Some credit cards, such as the Gem Visa and the Q Mastercard, offer both ways.

Conditions may apply to each type, such as a minimum spend requirement.

0% on purchases at any store

Purchases you make at any retailer will be entirely interest free for a period of time.

While you won’t accumulate interest, for some credit cards you might still have to make minimum payments each month.

At the moment, only the Gem Visa (6 months 0% on purchases) and the Q Mastercard (3 0% on purchases) provide this as an option.

Long term, interest-free finance at partner stores

This works a little differently in that you will only get the 0% interest on purchases at specific retailers the credit card company has partnered with.

While this does limit your options, the interest-free period on these finance deals can be much longer. Zero-interest for 12 months is common, and some retailers even offer as long as 3 years.

Depending on the deal offered by the retailer, your finance repayments will be one of the following:

• Minimum payment: As you would do with any credit card, you cover the card’s minimum payment. This is usually around 2% or 3% of the outstanding balance.
• Instalment payment: The total cost of the purchase is broken down into equal instalments over the interest-free period.
• No payments: Some finance options don’t require you to make any specific regular payments.

For all of these repayment types, you must pay off the entire amount during the agreed period in order to be charged no interest.

The following credit cards offer interest-free finance:

• Gem Visa
• Q Mastercard
• Farmers Mastercard
• Flight Centre Mastercard
• Purple Visa

We’ll look at each of these cards in detail in the next section.

The Gem Visa

The Gem Visa from Latitude offers 6 months interest free on all purchases over $250.

Cardholders can also access a wide range of interest-free finance deals from popular brands including:

• Michael Hill
• Furniture Now
• House of Travel
• Target

However, the details of those details are not very clear on the Gem Visa website. To find out exactly how long the interest-free finance period is for many of the deals, you will have to visit the retailer’s site or get in touch with them directly.

You can see the full list of finance participating retailers here on the Gem Visa website.

Bear in mind that each interest-free finance deal does involve an establishment fee of $55.

Top benefits of the Gem Visa

• 6 months interest free: The Gem Visa currently offers the longest interest free period of any NZ credit card.
• Range of interest-free deals: A variety of popular NZ and international brands offer interest-free finance through the Gem Visa.
• Digital wallet support: Pay from your Gem Visa with Apple Pay, Google Pay, Fitbit pay and Garmin Pay.
• 55-day interest free period: Purchases under $250 still have up to 55 days interest free.
• Mobile app: The Latitude App, available for Android and Apple devices, lets you track your spending and repayments on your Gem Visa.

Interest rates and fees

This is a summary of the main interest rates and fees that apply to the Gem Visa.

• Standard interest rate (applies after the interest-free period expires, if you make a purchase of less than $250, and to cash advances): 29.49%
• Annual fee: $55
• Establishment fee: $55
• Cash advance fee: $2 over the counter; $1 at an ATM
• International transaction fee: 2% of the purchase or cash advance

The Q Mastercard

The Q Mastercard offers 3 months interest free on all purchases, with no minimum spend needed. There are also zero repayments required during this period.

The Q Mastercard has some of the same interest-free finance partnerships as Gem Visa, but overall there is plenty of difference in the range of brands the 2 cards offer.

Interest-free finance deals from deals available on the Q Mastercard include from:

See the full list of participating retailers here on the Q Mastercard website.

The Q Mastercard website does a great job of explaining what interest-free finance deals are currently available, how long they are for, and when the offer will expire.

Top benefits of the Q Mastercard

• No minimum spend for 3 months 0% interest: Unlike the Gem Visa, Q Mastercard has no minimum spending requirement to qualify for the 3 month’s 0% interest on purchases.
• Zero repayments: The card also doesn’t require regular repayments during the 3 month interest-free period. Remember you must have paid off the total amount during the 3 months in order to pay nothing in interest.
• Regular promotions: Q Mastercard regularly has promotions to entice new customers, from credit back to your card to 0% balance transfer offers.
• Clear finance deals: Q Mastercard makes all the details of the long-term, interest-free finance deals clear and simple through its website.
• Mobile app: The card has a companion mobile app that lets you activate your cards, view your spending, access old statements, and more.

Interest rates and fees

Interest rates and fees that apply to the Q Mastercard include:

• Standard interest rate (applies after the interest-free period expires): 28.50%
• Cash advance interest rate:
  27.99%
• Annual fee: $50
• Establishment fee: $55 for the first long-term finance purchase, while an ‘advance fee’ of $35 will apply to any long-term finance purchases after that.
• Cash advance fee: $3
• International transaction fee: 1.4% of the purchase or cash advance

The Farmers Mastercard

The Farmers Mastercard doesn’t have a 0% on all purchases feature like the Gem Visa or Q Mastercard, but it does have similar long-term finance offers.

The Farmers Mastercard has similar long term finance deals to the Q Mastercard as both cards are issued by the same company, Columbus Financial Services.

Farmers Mastercard finance participating retailers include:

See the full list of participating retailers here on the Farmers Mastercard website.

Unfortunately, the Farmers Mastercard website does a poor job of providing details such as how long the finance period is for each retailer and if a minimum spend is required. Like the Gem Visa, you’ll have to reach out to the retailer directly.

Top benefits of Farmers Mastercard

• Earn Farmers Club Points: The Farmers Mastercard is also a rewards card, with each $10 spend on the card earning you 1 Farmers Club Point. For every 250 Farmers Club Points you earn you’ll get a $20 Farmers voucher.
• Double-dip rewards: If you make purchases at Farmers you can earn Farmers Club Points on both your credit card spend and your Farmers Club Card (if you have one).
• Regular promotions: The Farmers Mastercard often runs promotions such as credit to your account on sign up or competition entry. If the card interests you, it’s worth checking what offers they have at that time.
• Mobile app: The Famers Mastercard also has a corresponding mobile app that lets you access your statements and quickly check your available credit.

Interest rates and fees

Interest rates and fees that apply to the Farmers Mastercard include:

• Standard interest rate: 28.50%.
• Cash advance interest rate: 29.50%.
• Annual fee: $50.
• Establishment fee: $55 for the first long term finance purchase, while an ‘advance fee’ of $35 will apply to any long term finance purchases after that.
• Cash advance fee: $3.
• International transaction fee: 1.4% of the purchase or cash advance.

The Flight Centre Mastercard

Like the Q and Farmers Mastercard, the Flight Centre Mastercard is issued by Columbus Financial Services. As such, the card has similar features, interest rates and fees.

Long term, interest-free finance deals for the Flight Centre Mastercard are largely the same as the Farmers Mastercard, although there are some advertised differences.

Flight Centre finance participating retailers include:

See the full list of participating retailers here on the Flight Centre Mastercard website.

Like the Farmers Mastercard, the Flight Centre Mastercard doesn’t provide much detail on how long these finance deals are for.

Top benefits of the Flight Centre Mastercard

• Earn Flight Centre Rewards points: For every $100 you spend on your Flight Centre Mastercard you’ll earn 1 Flight Centre Rewards point. A Rewards Point is worth $1 and is automatically redeemed whenever you make a purchase as Flight Centre.
• Double rewards at Flight Centre: All spend at Flight Centre is worth double, meaning a $100 spend will earn you 2 Rewards Points.
• No fees on international transactions: The Flight Centre Mastercard is currently the only credit card in New Zealand to charge no fees on international transactions.
• 55-day interest free period: You’ll benefit from a maximum of 55 days interest free if you pay off your balance in full at the end of the billing period.
• Mobile app: A mobile app is available to keep track of your spending and download previous statements.

Interest rates and fees

Interest rates and fees that apply to the Flight Centre Mastercard include:

• Standard interest rate: 24.99%.
• Cash advance interest rate: 26.99%.
• Annual fee: $50.
• Establishment fee: $55 for the first long term finance purchase, while an ‘advance fee’ of $35 will apply to any long term finance purchases after that.
• Cash advance fee: $3 over the counter, $2 if withdrawing from an ATM.
• International transaction fee: $0.

The Purple Visa

The Purple Visa from Warehouse Money also offers interest-free finance deals, but there are much fewer participating retailers.

Currently, the list of participating retailers only includes Noel Leeming, Torpedo7 (in-store or online) and The Warehouse, and most recently, The Market.

Overall, the Purple Visa’s offering is not as strong as some of it’s competition.

Top benefits of the Purple Visa

• Earn Purple Dollars: With the card’s own rewards scheme, you can earn 1 Purple Dollar (worth 1 New Zealand dollar) for every $150 spent on the card. Purple Dollars can be redeemed at 6 stores including Noel Leeming, The Warehouse and The Market.
• 55-day interest free period: You’ll benefit from a maximum of 55 days interest free if you pay off your balance in full at the end of the billing period.

Interest rates and fees

Interest rates and fees that apply to the Purple Visa include:

• Standard interest rate: 26.65%.
• Cash advance interest rate: 29.40%.
• Annual fee: $55.
• Establishment fee: $55
• Cash advance fee: $5 over the counter, $1 if withdrawing from an ATM.
• International transaction fee: 2%.

How to get the best deal on an interest-free credit card

We explain what to look out for, and what not to do, when choosing an interest free credit card.

Remember that ‘interest free’ doesn’t mean you won’t pay anything

While all the cards described on this page can be completely free of interest, they all do have fees.

All interest free credit cards currently available in NZ have an annual fee of at least $50. They also all have an establishment fee that applies when you take out a long-term finance deal with a participating retailer — again this fee is at least $50.

This means that if you took out one of these credit cards and got a long-term finance deal with one of its participating retailers, you would have to pay at least $100 in fees in the first year.

Pay off the outstanding balance in the interest-free period

Purchases you make on one of these cards will only be interest free if you pay the total amount in the interest-free period.

If you don’t, the remaining balance will accrue interest at the credit card’s standard interest rate. For interest free credit cards, this rate is always higher than the average credit card and varies from around 22.5% to 26% per annum.

If you don’t think you will be able to pay off the total balance in the interest-free period, or shortly after, you may be better off with a low rate card with no annual fee.

Look out for special promotions

Interest free credit card providers run special promotions more frequently than traditional banks. Some even have multiple promotions running at once.

These promotions can include cash back on sign up, competitive balance transfer deals, competitions and more.

If you’re set on getting an interest free credit card, it’s definitely worth looking at what promotions each may be running.

We’ll keep this page updated with all the latest offers. 

Make sure you understand the finance repayment plan

Interest-free credit cards are more complicated than most, especially when it comes to those with long-term finance deals.

As we described at the top, long term finance deals come with different repayment requirements. These repayment requirements depend on the participating retailer’s offering and it’s different for each retailer.

Some require that just the standard credit card minimum repayment is made each month, while for others you will have to pay in equal instalments over the course of the agreement.

Some retailers don’t require you to make any regular repayments at all, as long as the total amount is paid off by the end of the agreed period.

If you take out an interest free finance deal with a credit card, make sure that you understand what the repayment requirements are so you aren’t hit with unnecessary fees.