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Credit Card Interest and Minimum Repayments in Australia

By PointsExplainedLast reviewed

Find your rates and due date

Your statement and Key Facts Sheet show your purchase rate, cash advance rate, any promotional rates and your due date.

Read the minimum repayment warning

Compare the minimum-only payoff time with the two-year repayment amount shown on the front of your statement.

Pay more than the minimum

Set a repayment you can sustain and automate it. Every extra dollar reduces the balance that attracts interest.

Target the costliest debt

If you have several cards, pay down the highest-rate balance first, or the smallest balance if that keeps you motivated.

Ask for help early

If repayments are becoming hard, contact your lender's hardship team or a free financial counsellor.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. Moneysmart (ASIC): Pay off your credit card

    RBA figures quoted by Moneysmart (14.7 million cards, $33 billion owed, almost $18 billion accruing interest, average rate over 18%); tips for paying off; reducing a limit takes one to two business days.

    moneysmart.gov.au · Accessed
  2. Moneysmart (ASIC): Choosing a credit card

    Interest-free days only apply if the full balance is paid by the due date; same RBA figures (page updated 26 August 2026).

    moneysmart.gov.au · Accessed
  3. Moneysmart (ASIC) glossary: interest-free period on credit cards

    Interest-free periods usually start on the first day of the billing cycle.

    moneysmart.gov.au · Accessed
  4. ASIC Report 788: Credit card lending in Australia: Staying in control (July 2024)

    Prohibition on retrospective interest since 1 January 2019 and its effect.

    download.asic.gov.au · Accessed
  5. Moneysmart (ASIC): Glossary (entry 'annual percentage rate (APR)')

    A single credit card has more than one APR (purchases, cash advances).

    moneysmart.gov.au · Accessed
  6. Moneysmart (ASIC) glossary: cash advance

    Cash advances accrue interest from the date withdrawn.

    moneysmart.gov.au · Accessed
  7. Moneysmart (ASIC): Credit card balance transfers

    Balance transfer promotional rate for a limited time, then a higher rate.

    moneysmart.gov.au · Accessed
  8. ASIC Report 580: Credit card lending in Australia (July 2018)

    2012 repayment allocation requirement (higher-rate balances first unless the consumer requests otherwise); minimum repayment warning required on statements from 1 July 2012 and its contents.

    download.asic.gov.au · Accessed
  9. ASIC media release 18-381MR: Lenders commit to improve credit card practices following ASIC review

    ASIC expectation that lenders allocate repayments on all cards in the way required for cards entered into after July 2012.

    asic.gov.au · Accessed
  10. Moneysmart (ASIC): Credit and debt

    Paying only the minimum means a lot of interest and could take years to pay off.

    moneysmart.gov.au · Accessed
  11. Moneysmart (ASIC): Financial hardship

    Lender must consider you for hardship assistance and give reasons if it refuses; arrangement doesn't affect credit score; National Debt Helpline 1800 007 007.

    moneysmart.gov.au · Accessed
  12. Moneysmart (ASIC): Credit scores and credit reports

    Hardship arrangement listing deleted after 12 months.

    moneysmart.gov.au · Accessed
Questions

About this guide

What happens if I only pay the minimum?

Moneysmart says you'll pay a lot of interest and it could take years to pay off the debt. Your statement's minimum repayment warning shows how long it would take and the total cost, alongside a repayment that would clear it within two years.

Can my bank backdate interest to purchases made in an interest-free period?

No. Since 1 January 2019, credit providers have been prohibited from charging interest retrospectively, for example on a balance that had the benefit of an interest-free period.

Which balance do my repayments pay off first?

Under requirements implemented in 2012, repayments go to the balances with higher interest rates first, unless you ask otherwise.

Will asking for hardship help affect my credit score?

Moneysmart says a financial hardship arrangement does not affect your credit score. Your report shows the arrangement, and the listing is deleted after 12 months.
Keep reading

Balance Transfers, Interest-Free Deals and Buy Now Pay Later in Australia

Card Surcharges in Australia: The 1 October 2026 Changes

Choosing Your First Credit Card in Australia