Certain transactions, like cash advances, attract higher interest rates. Regardless of how you’ve used your card, we won’t automatically add your repayments to the oldest transaction. We apply it wherever it’s needed first.

Give me the main points

  • We’ll add your repayment first to whichever transaction attracts a higher interest rate.
  • We go further than legislation. We’ve retroactively applied this payment allocation method to all our credit cards.
  • You need to be careful when using your credit card between statement periods.

Paying off the high interest rates first

We always put any credit card payment you make towards amounts that attract a higher interest rate. The most expensive transactions on your card are usually cash advances, so we always pay these off first.

Once all cash advances are taken care of, then we move onto normal purchases and fees. The everyday stuff.

And finally, once all the high and mid-range interest is taken care of, then we pay off the interest accrued from any special interest rates, like a short-term balance transfer.

Going further than we need to

The payment hierarchy outlined above wasn’t our idea. It became law on all cards issued from 1 July 2012. But regardless of the legality, we think it’s a pretty good idea. So we’ve applied it to all our credit cards, no matter how old or new.

And what if you pay more than your statement’s closing balance? We’ll put that extra towards amounts that haven’t appeared on a statement yet.

Spending between statement periods

If a statement has been issued, any new charges won’t be paid off until they too are on a statement. For example, have you ever paid for a bill over the counter? Have you ever paid it with your credit card? Did you know that these transactions aren’t considered purchases, but cash advances? Remember, these transactions charge a higher interest rate (and a cash advance fee).

Not only do cash advances have a higher interest rate than normal purchases, but interest starts to add up immediately. That’s zero interest-free days.

There are different types of interest you could end up pay depending on how you use your card. It’s really important to understand each of them, so you don’t end out paying too much. Our articles on the five types of credit card interest and how to avoid credit card interest can guide you in the right direction.

Important information

Credit cards issued by National Australia Bank Limited. © 2016 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686

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