What is Credit Card Interest?

American Express Credit Cards are a convenient way to pay for everyday purchases. A Credit Card is a lending product. When you make a transaction using your Card, we are lending you that amount of money and you are essentially taking out a loan.

As an American Express Cardmember, you have the flexibility to pay back the loan so that we receive your payment in full by the payment due date or over a longer period of time. A minimum payment is always due by the payment due date every month.

When you use your Credit Card, you are borrowing money – and will be charged interest unless you repay the full balance within the specified period. The amount of interest you will 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

When you receive your statements, the details of your purchases and the amount of interest you have been charged will be clearly displayed.

If you always pay your balance in full so that we receive your payment by the payment due date, interest will not be applied to any of your purchases. If you choose to carry a balance or if we receive your payment late, interest charges are calculated and charged to your account. Interest is always charged on balance transfers and cash advances starting from the day the transaction occurs.

Interest is calculated on any unpaid balance from the due date of your previous month’s statement. It is applied to your closing balance at the end of each day and then added up to make the current statement¹.

To avoid paying interest you need to pay off your total Credit Card closing balance by the statement due date.

The best way to reduce your interest charges is to make your payments early or pay your balance in full and on time.

Remember, the processing time varies by financial institution and by method of payment (Internet, Interbank GIRO, mail, telephone and bank branch). Confirm with your financial institution to ensure we receive your payment by the due date.

TIP: With Interbank GIRO, you can specify whether to pay your monthly Card bill in full or the minimum payment amount each month. This will help you establish a prompt payment record and avoid any interests or late payment charges.

'Interest free days' simply refers to the time from when you buy something using your Credit Card to when interest is applied to that purchase – which could be up to 21 days following the end of your statement period, depending on your Card.

To maximise 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 55 Interest Free Days and assumes that the previous month's balance has been paid in full.

The dates for which your statements are issued and report transactions for. Generally, your statement period will be every 30 days, and actual dates can vary slightly from month to month.

Type of charge incurred as a result of borrowing money and not repaying in full within the indicated time. Interest is usually expressed as an annual percentage rate, also known as the interest rate.

Interest Free Days are the time from when you buy something using your Credit Card to when interest is applied to that purchase balance – usually at the beginning of your next statement period.

The amount you owe at the end of a particular statement period.