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The Closing Balance vs the Minimum Monthly Payment

When you use your credit card to make purchases, then you’re essentially borrowing money from your credit card provider.

At ANZ, if you don’t pay your full closing balance by the due date shown on your statement each month, then you could be charged interest on your purchases balancedisclaimer. If you continually miss repayments, your credit rating could also be affected.

Here, we look at some key concepts relating to personal credit card payments and what they might mean for the bottom line.

The Closing Balance

This is the outstanding balance on the credit card account at the end of the statement period and includes purchases, and other transactions and fees, made during the statement period. As well as showing your closing balance, the account summary on your ANZ statement will also show the ‘Opening Balance’, ‘Purchases, Cash Advances & Other Debits’, ‘Interest Charges’ and ‘Payments & Other Credits’.

At ANZ, if your personal credit card account has an interest-free period on purchases, you may be able to avoid paying interest on purchases by paying the full closing balance shown on your statement by the due date each monthdisclaimer.

To help you plan ahead, you might want to track the amount that you have spent on your credit card as you go. This could help you be more prepared to understand what you might owe on your credit card come statement time.

The Minimum Monthly Payment 

In addition to the closing balance, your credit card statement will also include a line showing the minimum amount you need to pay to meet the terms of your contract, aka your 'Minimum Monthly Payment'. 

If you have anything due immediately like overlimit or overdue amounts, these will be shown as well . You would need to pay these amounts immediately in addition to the Minimum Monthly Payment to avoid a late payment fee on your next statementdisclaimer.

Remember, if you ever only pay the Minimum Monthly Payment, you will end up taking longer to pay off your card and will accrue more interest than you would if you paid your Closing Balance on time and in full each month. Check the ‘minimum repayment warning’ on your statement to see an estimate of how much interest you could pay – and how long it could take to pay off the closing balance – if you only make the Minimum Monthly Repaymentdisclaimer.

If you can’t pay the closing balance in full, but want to reduce the amount of interest you are charged, you can make a payment that is more than the Minimum Monthly Payment.

Remember that, by making a payment that’s less than the full closing balance, you may lose your interest-free period (if you have one) and you will generally be charged interest on your purchases balance from the day after the Due Date shown on that statementdisclaimer.

If you're worried about your credit card debt and your ability to make repayments, you should contact your credit card provider. They may be able to assist; and may have tools and resources to help relieve any financial stress.

If you are an ANZ customer having difficulty making credit card repayments, please contact us on 1800 252 845.

Getting into a routine with payments 

Whether you decide to pay off the full closing balance, the Minimum Monthly Payment (plus any overlimit amounts or overdue amounts) or an amount in between  – it’s important to ensure that you pay by the relevant deadline. On ANZ personal credit cards you need to have paid any amounts due immediately, and must pay the outstanding balance by the due date shown on your statement if you want to avoid being charged a late payment fee. Learn more about the payment due date.

Learn more about credit card payments

Getting to know your credit card statement

Even if you only use your credit card sporadically, you should check the statement of account carefully.

Read article

Things to know about your credit card due date

It's important to remember the due date on your credit card statement. If you miss the due date, it could cost you in late payment fees or you could lose the benefit of an interest-free period.

Read article

Information in this article refers to personal credit cards, is general in nature only and does not take into account your personal objectives, financial situation or needs. 

By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.

The information is current as at June 2019 and may be subject to change. ANZ recommends you review your personal credit card contract for information about the terms that apply to you.

ANZ interest rates and fees and terms and conditions are subject to change. Refer to the current credit card interest rates, fees and terms for further information and current interest rates, fees and terms. 

Applications for credit at ANZ are subject to ANZ’s credit approval criteria, terms, conditions and fees and charges apply. Australian Credit Licence Number 234527

At ANZ, if a consumer credit card account has interest free periods on puchases, the account holder can avoid paying interest on the purchases balance by always paying the full Closing Balance shown on each statement of account by the applicable Due Date. Not all accounts have interest free days on purchases and not all transactions (e.g., at ANZ cash advances) get the benefit of interest free days. Refer to the credit contract that applies to the relevant account for details.

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At ANZ, if a consumer credit card account has interest-free periods on purchases, the account holder can avoid paying interest on the purchases balance by always paying the full Closing Balance shown on each statement of account by the applicable due date. If the account holder doesn’t pay the full Closing Balance shown on a statement of account by the applicable due date, they will generally be charged interest on their purchases balance from the day after the Due Date shown on that statement. Not all transactions (e.g., cash advances) get the benefit of interest-free days. Refer to applicable credit contract for details.

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Note other fees may apply to overdue or over limit amounts.

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The information provided in the Minimum Repayment Warning is provided as a guide only. It provides an estimate of how long it will take an account holder to pay off a credit card closing balance for a particular month if the account holder only pays the Minimum Monthly Payment each month. It shows how much interest the account holder could end up paying assuming the account holder makes no new transactions and fees and interest rates do not change.

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Assuming the account holder had the benefit of interest free periods applied to their account at the start of the statement cycle.

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