If you don’t pay the full statement closing balance by your due date, you’ll lose your credit card’s interest-free period and be charged interest from the day after the due date. This interest is charged against everything you’ve purchased during the statement period, minus any payments you’ve made.
What is credit card interest?
When you make purchases with your MyCard credit card, you’re essentially borrowing money from us. Interest is a charge on that borrowed money. How much interest you’re charged depends on what type of credit card you have, if you use your card for retail purchases or to withdraw cash, and how much you repay, and when you make repayments.
Not sure what your interest rate is? Check the credit card fees and charges guide for the rates and fees applicable to your MyCard credit card.
Top ways to avoid or reduce credit card interest
- Understand how your credit card’s interest-free period works and use it.
- Pay off your full closing balance each month by the due date if you can.
- Pay more than your minimum monthly repayment if you can.
- Pay attention to promotional interest rates and when they end.
Use your credit card’s interest-free period
Most of our credit cards have an interest-free period. Depending on your card, the interest-free period will be up to 44 days or up to 55 days.
To be clear, this doesn’t mean you get 44 or 55 days interest-free from the moment you buy something. The 44 or 55 days begins at the start of your statement period and ends at your statement due date. This is what we mean by 'up to'.
How your credit card interest-free period works
In this example, we're using an August credit card statement. Purchases on this statement would have been made during the statement period in July.
If the statement period begins on July 5, this is also the date that the 44 days interest-free period begins.
If the statement period ends on August 3, you then have 14 days, ending on August 17, as your ‘payment window’ to make a payment.
To avoid paying interest in this example, you would need to pay off the entire statement closing balance by August 17.
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BPAY® payments and payments made through Australia post may take a few days to process.
Pay off your 'statement closing balance'
The best way to reduce the amount of credit card interest you pay, is to pay off your statement closing balance, or Interest Free Days Payment if you have an Instalment Plan or Balance Transfer, by the Payment Due Date displayed on your statement.
The statement closing balance is the total amount outstanding on your credit card account at the end of the Statement Period.
The Interest Free Day Payment amount displayed on your statement is what you need to pay to earn interest free days when you have either a Balance Transfer or Instalment Plan.
If you want to pay off your entire credit card debt as at the end of the Statement Period, you’ll need to pay the statement closing balance. If you pay this amount or the Interest Free Day Payment amount by the Payment Due Date, you won’t be charged interest on your Retail Purchases made in this statement period. Interest will still be charged on Retail Purchase Balance from the previous statement period or non-retail.
Pay more than your minimum monthly repayment
If you can't afford to pay off your credit card in full each month, consider paying a little more than your monthly minimum repayment instead.
By paying a little extra each month, you’ll pay less interest. Check out the ASIC Repayment Calculator to see how much you can save by making higher repayments.
Pay attention to special rates
If your credit card offers a promotional rate, pay attention to when it ends. The end date of a promotional rate is the last day that the interest will be calculated at the promotional rate, before reverting back to either the Retail or Cash Annual Percentage Rate (APR) depending on the circumstances of your promotional rate.
For example, if you have a Balance Transfer on your account and the promotional rate ends on 1st December, then the Balance Transfer amount will be calculated and charged interest at the Cash APR from the 1st of December.
You may have different balances on your account which can have their own interest rate. For example, a Balance Transfer or Instalment Plan may have a special promotional rate attached to it, and your retail purchases may have a different interest rate to your cash withdrawals. When you make a payment to your account, we will generally apply the payment to the portion of your statement closing balance with the highest interest rate first, and then the next highest, and so on. If you have an Instalment Plan on your account, we will apply payment to the amount due for that Instalment Plan before anything else. For more information on how payments are applied, please check the "Application of Payments" section in the Credit Card Terms and Conditions.
What happens if I don’t make my repayments?
You’ll be charged a late fee if you fail to make your minimum repayment by the payment due date for that statement. If you miss a repayment or don’t pay your statement closing balance in full, you’ll also lose the interest free period on your credit card. That means interest will be charged on your unpaid balance from the day after the due date on your statement, until you repay the balance in full.
To restart the interest free period on your credit card:
- Pay off the entire amount owing on your credit card to get interest free purchases from that day.
- Pay off the statement closing balance on your statement to get interest free purchases during your next statement period.
Get in touch if you're having trouble with repayments
We understand that life can take unexpected turns and leave you in a vulnerable financial position. If you're finding your credit card repayments difficult to make, we may be able to offer financial hardship assistance.
Contact us
Feedback and complaints
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Important information
BPAY® is registered to BPAY Pty Ltd ABN 69 079 137 518.
Read our Credit Card Terms and Conditions. Credit card fees and charges are payable. Approval and credit limit is subject to MyCard's credit assessment criteria. Information, including interest rates and annual card fees subject to change. Correct as at today. Please refer to the Target Market Determinations for our products. Credit cards issued by National Australia Bank Limited.