Understanding
Credit Card Interest
Ever wondered how your credit card interest works and when it rolls over again? We help to explain it.
Credit cards may be a flexible and convenient way for you to manage expenses by offering the ability to buy now and pay later.
Managing your credit card well and understanding exactly how the interest works helps you to avoid unnecessary fees and interest charges.
This information should be read in conjunction with our credit card terms and conditions. These can be found on our website at www.easystreet.com.au/support/credit-card-terms-and-conditions/
Benefits of Credit Cards:
You can take advantage of interest free days to help with purchases
It can be used everywhere Visa is accepted, including online
Helps you to manage expenses by offering the ability to buy now and pay later
Helps to minimise paying transaction fees that may be incurred on a debit card
Convenient when travelling overseas by providing a way to pay in various currencies
The interest you are charged can differ depending on the type of transaction made:
Purchases
You may be able to benefit from up to 55 days interest free on purchases however there are conditions. Read on to understand how interest free days work.
Cash
Interest is charged on the amount of cash withdrawn from the day you withdrew it and until it is paid off.
Balance Transfers
A balance transfer is when you transfer a balance from another financial institution’s credit card, or store card, to an Easy Street credit card. Interest is usually charged on these balances unless you’re eligible for a Balance Transfer Offer.
0% p.a. for 12 months on balance transfers*
Receive 0% p.a. on balances transferred for 12 months* when you switch your other financial institution credit card to us. Plus, at the end of the 12 months, you can rest assured you’ll still benefit from a low ongoing rate and up to 55 days interest free on purchases when you pay your outstanding balance in full by the due date each month.
Please note, you will be charged interest on retail purchases while you have a balance transfer.
Understanding an interest free period
Scenario: On September 30, Joan’s statement period ends and she receives her statement.
Her closing balance is $400 which is the total she spent in September on a jacket and concert tickets. She now has 25 days to pay off the $400 in full.
If she doesn’t pay back the $400 by 25th October, she’ll lose her interest free period on purchases and she will be charged interest on her unpaid balance (including any purchases made since her last statement period ended) from after the payment due date (25th October).
Joan will also incur a late payment fee if she doesn’t pay at least the minimum payment shown on her statement by the due date each month.
Please note that the closing balance does not include pending transactions. Any pending transactions will fall into the following statement period.
Regaining your interest free period
You regain your interest free days on the day you pay your last closing statement balance in full.
What happens if I do a cash advance?
A cash advance is any way in which you access cash on the credit card. This includes things like taking cash out at an ATM, taking, taking cash out at an EFTPOS terminal and transferring money from the account to another account.
These transactions don’t have any interest free periods and interest is charged on these balances from the day the transaction is effective. Any repayments made to your credit card will first go towards repaying cash advance balances.
Once all cash advances are repaid, only then will repayments then go towards retail purchases thereafter.
What happens if I do a balance transfer?
A balance transfer is when you transfer a balance from another financial institution’s credit card, or store card, to your Easy Street credit card (note: these must be processed by us).
It is important to note that repayments are applied first to Cash Advances, then Retail Purchases. Only after these outstanding balances have been repaid, then does your repayment go towards any outstanding Balance Transfers.
If you have taken out a balance transfer offer, the below applies.
What happens if you have a balance transfer offer?
If you have been approved for a balance transfer offer (for example, 0% p.a. on balance transfers for 12 months), you won’t pay any interest on the balance that was transferred to Easy Street for the first 12 months from the day the transfer is processed.
After the 12 months, if the balance is not repaid in full it will then convert to a cash advance and interest will then be charged.
Please note, you will be charged interest on retail purchases while you have a balance transfer.
Calculating interest and tips to manage fees and charges
- Retail purchases (subject to interest free days)
- Cash advances (interest charged daily), and
- Balance transfers and/or balance transfer offers (interest depends on whether an offer applies or not)
We calculate interest daily based on the closing balance of the different transaction types:
Tips to help you manage fees and interest charges on your credit card
Make bigger purchases at the start of the statement period to give yourself more time to take advantage of more interest free days and more time to repay.
Always make at least the Minimum Repayment due or full payment due each month.
Make your payments on time to avoid a late payment.
Avoid withdrawing cash from your credit card as interest is charged from the day you make the withdrawal.
You can request to reduce your credit limit online via our website provided you are in credit for that amount.
We can also transfer your credit card debt to a personal loan if you need help to pay it off. Get in touch with us if you need help getting on top of credit card debt.