To make sure you are getting the most out of your credit card, a good place to start is with a clear understanding of how interest is charged.
Credit card interest is calculated based on the balance you have outstanding on each day of your statement period. The interest rate, also known as the ‘Annual Percentage Rate’ (APR), is included on the front page of every statement you receive.
Among the features of using a credit card for your transactions, one of the most useful is the interest free period.
An example of how an interest free period works
Let’s say you start with a $0 balance, as you would if you had just activated your new credit card or you paid your previous month’s balance in full.
If your next statement period runs from 1 June to 30 June and your credit card features an ‘up to 55-days interest free period’, you will have approximately 25 days (the payment due date) after 30 June to pay your bill in full before you’re charged any interest on the transactions made in June. For example, if the statement period starts on 1 June and ends on 30 June (30 days) and the payment due date is 25 July (additional 25 days), purchase(s) made on 1 June would be 55 days interest free and purchase(s) made on 30 June would be 26 days interest free provided the closing balance of the June statement is paid in full.
Reinstating the interest free period
If you only make a partial payment on your statement balance, then all transactions made afterwards, including spending in future periods, will incur interest charges. If you only make a partial payment on your statement balance, then you will lose your interest free period and all transactions for that statement period, including spending in future periods and interest charges will incur. To reinstate your interest free period, ensure you pay the full closing balance each month and make the full payment by the payment due date each month.
All Macquarie credit cards offer up to 55 days interest free1. Compare the range of Macquarie credit cards online to find the best card for you, whether it is a card with a special balance transfer rate or you are seeking to be rewarded for your everyday spend.For more information on credit card interest rates, download our Understanding Interest booklet or speak to a Macquarie credit card specialist on 1300 150 300.