Avoiding Credit Card interest

Credit cards typically charge interest, so it's a good idea to understand what it is and how it works so you help minimise the amount you'll need to pay. The amount is determined by how much you spend, how much you repay, and when you repay it. But if you’re smart, there are ways to reduce how much interest you’ll pay.

Paying off your closing balance

The best way to avoid interest is to pay off your closing balance before your statement’s due date. Credit cards come with "up-to-44 days" or "up-to-55 days" interest-free on purchases. Interest to pay doesn’t build up until after the statement due date.

If you think you’re likely to forget to make manual payments, why not set up a direct debit in Internet Banking or the NAB app to pay it in full each month? If you’d still prefer to pay it manually, you can set up a payment reminder as a prompt. Find out more about NAB Alerts.

Using interest-free days

Our cards will say either “up to 44 days” or “up to 55 days” interest-free. But to be clear, it doesn’t mean you get 44 or 55 interest-free days from the moment you buy something. The "44/55 days" is from the start of your statement cycle to your statement’s due date. This is what we mean by "up to".

So, you could get between a week interest-free or a maximum of 44 or 55 days. But remember, if you don't pay it in full, or if you have a balance transfer the 'interest free days payment', each month, you don’t get that interest-free period.

Balance transfers

While you have an outstanding balance transfer, to be eligible to receive interest-free days on purchases, pay the interest free days payment in full by the due date each month.

Making a cash advance

A standard cash advance is withdrawing cash from your credit card. But since this isn't considered a purchase, interest-free days don’t apply. This means interest starts to add up from the moment you make the withdrawal.

Cash advances should be a last resort or in case of an emergency. If you need cash, it’s a way to get it if you’re stuck. But remember, the interest accrued for a cash advance is usually quite high, so pay it back as soon as possible.

Other cash advance examples:

• Cash out from your credit card account at an ATM, or over the counter
• Money transferred out of your credit card and into another account
• Using your credit card for gambling
• Bills paid with your credit card over the counter at another bank or at a post office. Online bill payments are usually okay, but check with your biller first
• Things bought that work more or less like cash, like traveller’s cheques or gift cards.

Enjoying special rates

Special rates for purchases end. And the end date isn’t the last day you can make purchases at a special rate. It's the last day we’ll charge you the special rate.

For example. If a special rate ends 31 December, your closing balance will accrue higher interest from 1 January. This is regardless of any purchases before 31 December.