Creducation - Interest
Welcome to ANZ Creducation. An online educational series about credit cards.
Today, we’re dipping into credit card interest.
Understanding personal credit card interest can be like running a bath. It’s important to keep an eye on it and know what to look out for.
To increase your chances of smoother sailing – it’s important to get an understanding of how interest works.
So, if you choose to have a credit card, you might want to make a plan for how you’re going to use it and consider how interest could come into play.
You could choose to make only the Minimum Monthly Payment shown on your statement but you might end up paying more interest this way and it may take longer to pay off or reduce your credit card balance.
So if your goal is to pay less interest, you could consider paying more than the minimum amount each month.
If an interest free period applies to purchases on your credit card account, you may get up to a certain amount of days interest free, say 44 or 55, as long as you satisfy certain conditions.
But not all purchases will get the full amount of interest free days. And some things won’t get any at all.
Let’s say this duck is a purchase you made on the first day of your interest free period.
This purchase could get the maximum amount of interest free days applicable, but let’s consider these two purchases.
So, for example, if they were made later in the statement period, they wont get as many interest free days as a purchase made earlier.
You may also have to satisfy certain conditions like paying your closing balance in full each month to maintain the benefit of an interest-free period.
So it’s important to familiarise yourself with how they work.
Keeping this in mind might help you keep your ducks in a row.
So in short, remember… If you choose to have a credit card, think about making a plan for how you want to use it.
Consider paying more than the Minimum Monthly Payment shown on your statement if your goal is to pay less interest.
And be sure to familiarise yourself with how interest-free periods work, if they apply to your account.
So, there you have it. Just a few tips that could help you get your house in order when it comes to personal credit card interest.
Make sure you check out the full series for more Creducation.