Credit card payment

You may look at your monthly statement and think that it’s in ‘google gog’ but don’t stress as we’ll demystify all things relating to credit card payments to have you understanding your bill in no time. We’ll even have you saving money by the end of this guide!

How is the card balance calculated

Your credit card balance is based on purchases you have made during a defined month e.g. groceries, entertainment etc. On top of the purchases you have made, the card balance may also include interest. If you have paid the credit card balance in full each month, the balance will only be the sum off all your expenditure. However, if you have not paid off the previous month's balance, then interest will be included. Find out when you’ll be debt free with our nifty credit card debt payments calculator.

How is the interest calculated each month?

There is a little mathematical equation to calculating the interest owing on your credit card purchases. The good news is you don’t have to do the maths! There’s no harm however in knowing how the interest is calculated each month.

There are three components:

  • Annual percentage rate (APR)
  • Daily rate (APR divided by 365 days in a year)
  • Daily balance

The formula: The outstanding daily balance multiplied by the daily interest rate of your card multiplied by the number of days in the month.

For example: If you owe $2000 on your credit card at 31 January (i.e. month end) with a 15% interest rate, the calculations go like this; $2000 x 0.041% (daily percentage rate) x 31 (number of days in January) = $25.42 (interest owing). Just think, if you had to pay $25.42 in interest each month, that’s just over $300 a year! Pay your credit card back in full each month and you could pocket that $300.

Ready to start comparing cards?

Credit Card Comparison Tale - last updated 29 September 2021

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • Apply By 31 Oct 2021
    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for up to 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for up to 12 months. Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 12 months then 11.99% p.a.
    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    -
    Details
  • Great Southern Bank Low Rate Credit Card

    0% balance transfer rate for 20 months and up to 55 interest free days. No annual fee for the first year and $49 after. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    11.99% p.a.
    0% p.a. for 25 months and then 21.74% p.a.
    $49 $0 in the first year
    -
    Details
  • Apply By 10 Oct 2021
    humm90 Mastercard

    With up to 110 days interest free on your spending, this card is pretty unique in the market, and great for managing your daily spend. Plus, no foreign transaction fees overseas or online.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    23.99% p.a.
    0% p.a. for 36 months and then 25.99% p.a. (0% balance transfer fee)
    $99
    -
    Details
  • Apply By 28 Oct 2021
    PayPal Rewards Card

    Enjoy 50,000 bonus points (conditions apply). Receive 55 interest free days on purchases and 0% balance transfer rate for the first 20 months.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.99% p.a.
    0% p.a. for 20 months and then 20.99% p.a.
    $0
    PayPal Rewards
    Details
  • Great Southern Bank Platinum Credit Card

    0% p.a. balance transfer, $0 annual fee for the first year and also receive 1 rewards point for every dollar spent. Purchase protection insurance. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.99% p.a.
    0% p.a. for 25 months and then 21.74% p.a.
    $149 $0 in the first year
    Great Southen Bank Platinum Rewards
    Details
  • Apply By 30 Nov 2021
    St.George Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 32 months, plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    12.99% p.a.
    0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
    $59 $0 in the first year
    -
    Details
  • Mozo Expert Choice Badge
    American Express Low Rate Credit Card

    Competitive low rate with $0 Annual Fee. Get $100 back when you apply online by 27 October 2021, are approved and spend $1,000 on your new Card by 31 December 2021. T&Cs apply. New Card Members only. Customers need an annual income of $50,000 or more.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    8.99% p.a.
    No current offer
    $0
    -
    Details
  • NAB StraightUp Card

    Pay no interest and no late payment fees, just a $10 monthly fee for a $1,000 credit limit. Plus, if you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Also pay no foreign currency fees when you shop online or overseas. Mozo Experts Choice Credit Card Innovation Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a.
    No current offer
    $120 $10/month - waived if no spend & no balance owing
    -
    Details
  • Apply By 19 Oct 2021
    Mozo Expert Choice Badge
    American Express Platinum Edge Credit Card

    Receive 50,000 Bonus Membership Rewards when you apply online by 19 October 2021, are approved and spend $1,500 on your new Card within the first 3 months. T&Cs apply. New Card Members only. $0 introductory annual Card fee for the first year..

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $195 $0 in the first year
    Membership Rewards
    Details
  • HSBC Platinum Credit Card

    0%p.a. on balance transfers for 36 months with no balance transfer fee. Terms and Conditions apply. Mozo Experts Choice Premium Rewards and Balance Transfer Platinum Credit Card Winner 2020.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.99% p.a.
    0% p.a. for 36 months and then 21.99% p.a.
    $129 $29 in the first year
    Rewards Plus
    Details
  • Apply By 26 Oct 2021
    Mozo Expert Choice Badge
    American Express Explorer® Credit Card

    Receive 150,000 Bonus Membership Rewards Points when you apply online by 26 October 2021, are approved and spend $3,000 on your new Card within the first 3 months. T&Cs apply. New Card Members only.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $395
    Membership Rewards
    Details
  • St.George No Annual Fee

    0% p.a. for 12 months on APR requested at card application. The special promotional purchase rate applies from card approval, after the promotional period, the rate will switch to the variable purchase rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 12 months then 20.74% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $0
    -
    Details
  • Mozo Expert Choice Badge
    American Express Qantas Ultimate Card

    Receive 110,000 bonus Qantas Points plus $200 back when you apply online by 27 October 2021, are approved and spend $3,000 on your new Card within the first 3 months. Offer available to new Card Members only. Plus, receive up to 40,000 extra Qantas points with Shop Small (T&Cs apply)

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $450
    Qantas Frequent Flyer
    Details
  • Apply By 30 Nov 2021
    St.George Vertigo

    0% p.a. for 30 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    0% p.a. for 30 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • Mozo Expert Choice Badge
    American Express Cashback Credit Card

    Get 5% Bonus Cashback in the first 3 months and no monthly fee for the first 12 months. Additional 1.5% cashback with American Express Shop Small Campaign (conditions apply). Complimentary perks and insurances. Eligibility criteria and T&Cs apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $120 $0 in the first year
    Cashback Rewards
    Details
  • Apply By 30 Nov 2021
    Bank of Melbourne Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • Apply By 30 Nov 2021
    Westpac Altitude Platinum

    Earn up to 60,000 bonus Qantas Points ($3k min. spend in the first 90 days on eligible purchases). 0% p.a. for 18 months on balance transfers requested at card application. 1% BT fee applies. $99 + $50 Annual Qantas Rewards card fee for the first year. New cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.49% p.a.
    0% p.a. for 18 months and then 21.49% p.a. (1.00% balance transfer fee)
    $200 $149 in the first year
    Qantas Frequent Flyer
    Details

Key credit card bill terminology:

  • Interest-free days: Have to love a freebie! Interest-free days is a period of between 44 – 62 days of which you can pay off the full balance on your credit card without incurring interest charges. The interest-free days apply from the start of your billing cycle, not from the date you make a purchase. Make the most of the opportunity to avoid paying interest, if not it will just keep on accumulating! Compare interest free credit card right here.
  • Interest rate: Without complicating things, quite simply, this is the amount at which interest is charged on the outstanding balance on your credit card.
  • Minimum repayments: This is the minimum payment you are required to pay off your balance each month. Take note, just because you pay the minimum amount owing on your statement, doesn’t mean you will avoid interest charges. We go into more detail on minimum payments below.
  • Balance transfer rate: This is a fee you will be charged when you transfer outstanding debt from one credit card over to a new card. This charge can be anything from 1% - 5% of the balance amount. Compare balance transfer credit cards.
  • Revert Rate: The credit card revert rate is the interest rate your card will turn to once the ‘honeymoon period’ is over. Having initially enjoyed a low or zero interest period, you will now revert to a much higher rate which will be ongoing.

Compare credit cards on Mozo to find the best deal on the market!

Making credit card repayments

When you receive your monthly credit card statement you’ll find a lovely big bold figure at the bottom of the page - this is your closing balance. You can make this payment in full or you have the option of making a minimum repayment. Whenever you can, we strongly advise that you pay the full balance owing on your credit card and that way you will avoid paying interest on your purchases.

However if you can only afford to make the minimum repayment there a few important facts you need to know:

  • The minimum payment is usually 2% of the closing balance or $10, whichever is the greater
  • Your statement will include the minimum amount owing
  • If you pay the minimum amount by the due date you will avoid a late fee
  • Paying the minimum amount may not actually reduce your card’s balance as most of the amount is paying interest
  • If you don’t pay the minimum amount your provider may put a freeze on your card
  • Only paying the minimum amount means you will never become debt free
  • When you pay the minimum amount you’ll then be charged a month’s worth of interest on your balance each day for that statement period .

How long it will take you to pay off your credit card?

Setting a repayments budget

As you have just read above, paying only the minimum amount on your credit card statement each month has its downfalls. So to dodge interest charges and to pay off your credit credit quickly in order to become debt free, we highly recommend you do a repayments budget. It’s important to have self-control and to stay within the means of your credit card. So, don’t over spend! A repayments budget is especially vital for those who have irresponsible financial habits. A budget is also crucial to saving money and that could mean you’re financially able to jet overseas for that dream holiday or put a deposit down on your own home. Use the Mozobudget calculator as that will help you estimate how much you can afford to to make in credit card repayments each month.

Credit card repayment insurance

It’s up to you if you want to take out credit card repayment insurance, it’s by no means compulsary. Credit card repayment insurance will protect you if something unforeseen happens and you can no longer make your payments. Credit card repayment insurance will cover you when:

  • You lose your job
  • Are unfit to work e.g illness, injury
  • If you die

Different providers have different rates for credit card repayment insurance. Premiums can range from 50cents for every $100 owing on your card. If you’re considering taking out insurance on a new or existing credit card, talk to your bank or financial institution about their costs.

Make sure you plug some numbers into our credit card debt payments calculator to see when you’ll be debt free.

Ways to pay your credit card bill

Thanks to the tech savvy world we live in, there are plenty of efficient and quick methods to pay your credit card bill each month. Here are your options:

  • Set up an automatic payment plan: This is easy to do and ensures you pay your bill on time, avoiding any late payment penalties. The payment is made automatically from any Australian bank savings or transaction account. You can set it up to pay the full closing balance, the minimum payment as shown on your statement or a percentage of the closing balance which some banks allow.
  • BPAY: This is a new added convenient way of paying your credit card bill. BPAY is a free transaction service and can be accessed on your financial institutions online site or via telephone banking. You can find the BPAY biller code and reference number at the bottom or on the back of your credit card statement.
  • In person: It may seem old school but you can always pop into your nearest bank branch and pay your credit card bill in person. You can pay in cash, by card or cheque.
  • Over the phone: Telephone banking can be done 24hours 7days a week.
  • Mail: Who doesn’t like receiving money in the post! You can send a cheque but remember it does take several days to be cleared.

What to do if you are having trouble repaying debt

If you are faced with financial hardship and are struggling to repay your credit card debt, get in touch with your credit provider ASAP. A lot of financial institutions have specialists on board that are there to listen to your financial situation and provide personal assistance. It’s important to act quickly to avoiding spiralling into more debt with late penalties. Here are some more tips on what to do if you can’t pay your credit card debts.

5 top tips to manage your debt

1# Pay off your credit card balance in full each month

2# Don’t overspend. Stick to a budget and use your credit card only when necessary

3# Set up an automatic payment plan

4# If you have more than one credit card consider a balance transfer card

5# Reduce your credit limit if you’re constantly going over your budget

^See information about the Mozo Experts Choice Credit Card Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.