Credit Card Interest Rates

Here’s what you need to know about
Credit Card interest.

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What is Credit Card interest?

When you pay by Credit Card, you’re borrowing money, and you’ll be charged interest unless you repay the full closing balance by the statement due date, or within your Credit Card’s interest free period.

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How does Credit Card Interest work and when is it charged?

The amount of interest you’ll be charged depends upon:

  • The interest rate of your Credit Card
  • The amount you spend
  • When you spend it
  • When you pay your Credit Card bill

Most Credit Card holders can avoid Credit Card interest payments by paying off their full balance each month. But if you pay anything less, such as the minimum payment, you will incur interest on outstanding balances, as well as any previously charged interest. Details of your purchases and the amount of interest you’ve been charged will be clearly displayed in your Credit Card statements. 

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How is interest calculated?

Interest is applied to your closing balance at the end of each day and then totaled up to calculate your monthly statement balance1.

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What is a Credit Card interest free period?

The Credit Card interest free period, or ‘interest free days’, refers to the time between purchasing something with your Credit Card and when interest is applied to that purchase. Depending on your Card, this can be up to 25 days following the end of your statement period.

To get the most from your Credit Card's interest free days, make your purchase on the day a new statement period begins and pay the closing balance by the due date shown on your statement.

In the example below, the Credit Card has up to 55 interest free days and assumes that the previous two months’ balance has been paid in full.

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How does interest differ between Credit Cards and Charge Cards?

The key difference is that Charge Cards require you to repay the full closing balance of the statement each month, meaning no interest is charged on your purchases. However, a fee will be charged if the closing balance is not paid in full by the due date. On the other hand, a Credit Card allows you to repay your balance over time by making the minimum payment each month, with interest applied to the unpaid balance. A late payment fee will apply if you don’t meet your minimum monthly repayment obligation.


Low interest benefits

What are the benefits of having a low interest rate Card?

  • If you choose to carry a balance from month to month, a low interest rate Card helps reduce your cost of borrowing.
  • With less interest charged, you can pay down your balance sooner.
  • Allows you to enjoy a low ongoing interest rate for any unpaid balance.

Pay off your balance in monthly instalments


Plan It Instalments offers you a flexible way to pay off your Credit Card balance in equal monthly instalments, with 0% p.a. interest and a fixed monthly fee*. It’s already on your Card, so you can keep buying wherever you normally shop and pay later in instalments.


What do you want from a Card?

Everyone’s different, so you need a Card that has benefits that best suit your lifestyle.
Choose the Card with benefits that best suit you.


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Want to learn more about Credit Cards?

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