What is the minimum credit card repayment?

Look for the minimum repayment figure on your statement

When you get your credit card statement, you’ll see a Minimum Monthly Payment figureTooltip  and a Due Date.Tooltip

You must pay the Minimum Monthly Payment by the Due Date – plus any amounts due immediately, such as any overlimit^disclaimerTooltip or overdue amounts^disclaimer – otherwise you’ll be charged a late payment fee on top of any interest charged to your credit card account.

While it may be tempting to only pay the Minimum Monthly Payment each month, your goal should be to pay off as much of the Closing Balance (or if applicable, the 'Adjusted Closing Balance')Tooltip  as you can afford by the Due Date on your statement. That way, you could potentially pay less interest on your credit card while avoiding any late payment fees.

What’s more, if you’re disciplined and pay back your Closing Balance (or if applicable, the ‘Adjusted Closing Balance’)Tooltip in full by the Due Date every month, you can avoid paying interest on your eligible card purchases altogether.

Here are some tips on how to stay on top of your credit card repayments.

What happens if you only pay the minimum amount due?

We’re going to tell it to you straight. If you frequently use your credit card and only make the Minimum Monthly Payment, you might quickly find yourself in financial trouble.

There are two things to remember:

1. Your credit card statement will include an estimate of the interest you could incur if you only make the Minimum Monthly Payment each month.^disclaimer
2. It will also provide an approximate figure of how much you’ll need to pay each month to clear your Closing Balance (i.e., your credit card debt) within two years.^disclaimer

In the example below, this credit card has a Closing Balance of $6,288.52 with an interest rate of on purchases only.^{disclaimerdisclaimer}

The Minimum Monthly Payment, which is $126.00 per month in this example, can be found at the top right corner of the statement.^disclaimer

Now take a look at the Government warning at the bottom of the statement.

If you were to only pay the Minimum Monthly Payment of $126.00 each month, it would take you approximately 59 years and 10 months to clear your card debt of $6,288.52. What’s more, you’ll end up paying an estimated $34,836.11 in interest over that 59-year-plus period.^disclaimer

And that’s assuming you make no new purchases or transactions, and your fees and interest rate don’t change. A sobering thought, but don’t despair yet.

Making extra repayments is certainly the way forward

The Government warning also gives you an estimate of how much you’ll need to pay back each month to clear your card debt of $6,288.52 within two years. In this case, it’s approximately $323.11 per month.

Do this and you’ll pay approximately $1,466.12 in interest over that two-year period – a saving of $33,369.99 (assuming you make no new purchases or transactions, and your fees and interest rate don’t change).^disclaimer

As you can see, the difference between the two is considerable, which is why it’s advisable to always pay as much as you can.

Tips for those finding it difficult to pay more than the minimum

Looking for some tips on how to manage your money a little better so that you can increase your credit card repayments? You may find our articles on spending habits and tips for a weekly budget useful. For comprehensive tips, tools and guides on budgeting and saving, check out ANZ Financial Wellbeing.

Remember, paying the Closing Balance should be your aim

If you don’t pay the Closing Balance (or if applicable, the 'Adjusted Closing Balance') in full by the Due Date shown on your statement, we will charge you interest on the Purchases balance from the day after the Due Date.

Therefore, the best way to avoid paying credit card interest is to pay the Closing Balance (or if applicable, the 'Adjusted Closing Balance')^disclaimerTooltip in full by the Due Date each month.

How the interest-free period works

At ANZ, the interest-free period on purchases for our non-business cards varies depending on the credit card.^disclaimer

Some cards – such as ANZ Low Rate, ANZ First and ANZ Platinum – come with up to 55 days' interest free. Whereas others – such as ANZ Rewards Black, ANZ Rewards Platinum, ANZ Frequent Flyer Black and ANZ Frequent Flyer Platinum – come with up to 44 days’ interest free.^disclaimer

Remember, it’s “up to” 44 or 55 days, not 44 or 55 days from each purchase. Given interest-free periods run from the beginning of a statement cycle until the payment Due Date, the number of interest-free days will depend on when you make the purchase within your statement cycle (and the type of purchase).^disclaimer

By sticking to this one golden rule – that is, paying off your credit card in full by the Due Date each month – you’ll avoiding paying interest on your credit card Purchases balance, while making positive moves towards your financial wellbeing.

Other tips to clear or reduce your credit card balance

Review your budget to see where you can make some cutbacks on your discretionary spending, or sell some things you no longer need, and then commit to using those savings to make higher repayments on your credit card. You can also use helpful tools such as the MoneySmart credit card calculator to illustrate how much of a difference extra repayments make.^disclaimer

Other options that may be available to you include ANZ Instalment Plans or consolidating your card debt through a balance transfer^disclaimer or a personal loan.

What to do if you’re in financial difficulty

If you’re experiencing financial difficulty, our Customer Connect team can assess your situation and look at options that may be available to you – whether that’s giving you a hand in the short term or setting you up for the long term. Learn more by visiting financial hardship.