The interest free period is sometimes overlooked as a card feature. Consumers tend to focus more on the interest rate. But while there is no denying the importance of the rate, the interest free period can have a surprising impact on the total amount of interest you'll pay over time.
Most interest free periods are between 44 and 55 days. When comparing two cards (such as this card and its sibling, the Commonwealth Business Low Rate), the card with an interest free period has sort of a 'head start'. Most businesses will have repaid the full balance by the time the accumulated interest on the Interest Free Days card exceeds that of the Low Rate.
We'll demonstrate with an example. It's difficult to make generalizations about business expenditure, but we'll use a $3,000 balance and examine the interest accumulated over time on both cards (assuming no further purchases or payments).
On the Low Rate (at 12.55%, without the optional property security), after 55 days, you'd have accumulated almost $57 in interest. On the Interest Free Days (which has an interest rate of 15.57%), you'd have paid none.
Even after 100 days, you'd have paid $103 on the Low Rate and just under $58 on the Interest Free Days.
In fact, it will be 284 days before the Low Rate becomes a cheaper option.
This example is fairly academic. You're unlikely to make a single large purchase and then neglect to make payments for 284 days. If you do, Commonwealth debt collectors will have long-since knocked on your door. But it's indicative of the impact an interest free period can have on the cumulative interest paid over time.
Of course, most of that benefit is negated once you consider this card's $60 per card annual fee. We can understand a $60 account fee, but for every card?
The verdict: the Commonwealth Business Interest Free Days is only a viable option if you need one card. If you require more than one card, consider the Commonwealth Business Low rate, which has much lower per-card costs.
