Calculate how long it takes to pay off your credit card and how much interest you'll pay. See the cost of only making minimum payments.
| Scenario | Months | Total interest |
|---|
Average Australian credit card purchase rate is approximately 20% p.a. Low-rate cards offer 8–13% p.a. Interest-free periods (up to 55 days) apply only if the balance is paid in full each month.
On a $5,000 balance at 20% p.a., paying only the minimum 2% per month takes over 30 years and costs more than $7,000 in interest — more than the original debt.
Australian credit cards charge interest daily on any balance that carries over from one statement period to the next. The daily rate is the annual rate divided by 365. If you pay your full closing balance by the due date each month, you pay zero interest (the "interest-free" period, typically 44-55 days). If you carry any balance, interest is charged from the date each transaction was made.
| Monthly Payment | At 19.99% p.a. | Years to Pay Off | Total Interest Paid |
|---|---|---|---|
| Minimum (2% of balance) | Starting $100 (declining) | 22+ years | $7,400+ |
| Fixed $150/month | $150 | 3.8 years | $1,840 |
| Fixed $250/month | $250 | 2.1 years | $960 |
| Fixed $500/month | $500 | 1 year | $440 |
How is credit card interest calculated in Australia?
Interest is charged daily on any outstanding balance from the date each purchase was made (if not paid in full by the due date). Daily rate = Annual rate ÷ 365. At 19.99% p.a., daily interest on a $5,000 balance is $5,000 × (0.1999 ÷ 365) = $2.74/day, approximately $82/month.
What is the interest-free period on Australian credit cards?
Most Australian credit cards offer 44-55 interest-free days on purchases if you pay the full closing balance by the due date each month. This applies to new purchases — cash advances and balance transfers do not receive interest-free periods and are charged interest from day one.
What is the average credit card interest rate in Australia?
The average credit card purchase rate in Australia is approximately 17-19% p.a. according to RBA statistics. Low-rate cards charge 10-13% p.a. while rewards and premium cards charge 18-23% p.a. The RBA monitors these rates — they have remained stubbornly high even as the cash rate changed significantly.
Should I do a balance transfer to pay off credit card debt?
A balance transfer can be highly effective if you can pay off the full transferred balance within the 0% promotional period. Calculate: balance ÷ promotional months = minimum monthly payment needed. If you can make that payment consistently, balance transfer is one of the cheapest ways to clear credit card debt. Watch for transfer fees (1-3%) and the revert rate after the promotional period.
How does the credit card calculator work?
This credit card calculator shows how your balance, interest rate and monthly repayment affect the payoff time and total interest. Adjust the repayment to see how much sooner you can clear the card.