Interest-free shopping could be cheaper than using a credit card

It may be better for consumers to use an interest-free payment option when shopping instead of a credit card, one industry expert has noted.

A credit card may not be the cheapest way to go about purchasing products, according to one industry expert.

Alex Tilbury, writing for the Advertiser, noted that consumer finance leaders believe interest-free shopping is both smarter and cheaper than using an Aussie credit card.

Those who use the former option to buy items can avoid spending anymore money than they have to if they pay off their purchase within the interest-free period.

Gerry Harvey, boss of electric retailer Harvey Norman, advised consumers that they should always pay cash for goods if they can afford it.

He added: "People tell me all the time that they are on their fourth or 21st interest-free purchase. But the ones that write us letters and are very unhappy don't pay and get hit with the penalty interest rate."

This news comes after a report by Dun & Bradstreet revealed that nearly half of Aussies are worried about forthcoming interest rate rises, the Australian Associated Press reported.

By Joe Letts