Credit card interest is a charge for borrowing money from a financial institution with your credit card. How much interest you’ll pay depends on the type of card you have, the transactions you make, and when you make repayments. How your credit card interest is calculated may vary depending on who you bank with. At CommBank, we calculate interest from the day each purchase is made up until it's repaid in full. This applies to all purchases unless you're eligible for an interest-free period. (We explain interest-free periods below.) To work out your interest charges, we calculate interest separately for: For each of these categories, we follow these steps: If you have a
balance transfer or instalment plan, the interest rate we use will be shown when you apply. Applicable interest charges and interest rates can also be found on your monthly credit card statement. Interest-free periods on purchasesMost CommBank credit cards come with an interest-free period on purchases, meaning you won’t be charged any interest on purchases, so long as you pay your closing balance in full by the due date every month. Download example* When interest is chargedIf you don’t pay your closing balance in full by the due date – that is, if you only pay the minimum amount shown on your statement, make a partial payment, or don’t pay on time – you will be charged interest and lose your interest-free period. If you lose your interest-free period, we’ll charge interest on the unpaid balance from the day after the payment due date shown on your statement, until you repay in full. Losing your interest-free period means that any new purchases you make will incur interest from the day you make them until they're paid off. Download example# Some transactions don't have interest-free periodsSome types of transactions have no interest-free period, which means they accrue interest from the day they are made until they are repaid in full. With CommBank credit cards, this includes:
Similarly, some credit cards have no interest-free periods (such as CommBank Business Low Rate credit cards). All transactions on these cards accrue interest from the day you make the transaction until they're paid off. How to stop paying interestInterest is charged to your account on the last day of your statement period. The easiest way to avoid paying interest is to always pay your statement’s closing balance on time, and not make any cash advances. If you've been paying interest on purchases, you can regain your interest-free period by:
Download example^ Remember, you don’t need to wait until the due date to pay off your credit card. The sooner you pay off everything you owe, the less interest you’ll need to pay. When you pay your account balance in full, it’s important to remember that there may still be interest owing. Your next statement will include any interest accrued from the start of your statement period up until the time we receive the payment. Reduce the interest you payHere are a few other tips to help you minimise interest:
On top of the payable interest, you may also be charged a late payment fee, and your credit score may be impacted if you don’t pay at least the minimum amount shown on your statement by the due date. How interest is calculated on credit card cash withdrawal?Calculated at a monthly percentage rate on the cash amount withdrawn, the time frame for interest calculation is from the date of withdrawal until the settlement of the total withdrawn amount. It ranges anywhere between 1.99 per cent to 3.49 per cent. However, in case of any default, it is 3.50 per cent (maximum).
How do you calculate cash advance fee?Cash advance fee: Your card issuer often charges a cash advance fee, which is typically 3% or 5% of the total amount of each cash advance you request. For example, a $250 cash advance with a 5% fee will cost you $12.50.
How much is the interest for cash advance?For most credit cards, the cash advance APR is significantly higher than the APR for purchases. Cash advance interest rates typically range from 17.99% to 29.99% APR.
How do you avoid interest on a cash advance?Pay off your cash advance as fast as you can
Since your advance begins accruing interest the same day you get your cash, start repaying the amount you borrow as soon as possible. If you take out a $200 cash advance, aim to pay that amount in full—or as much as possible—on top of your minimum payment.
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