What is a credit card?

A credit card is a way to borrow money or get ‘credit’ from a bank. The official term is ‘revolving line of credit’. In normal speak it’s a card with a set amount of funds (called a 'limit’) you can borrow at any time. This limit is set when you apply for a card.

Where accepted, you can use a credit card to buy things without cash and pay for purchases online or over the phone.

Like all debts, you need to repay the credit card. Credit cards have interest rates, which apply to amounts that you haven’t paid back, there’s a minimum monthly repayment, and most cards have an annual fee.

You should apply for a credit card only if you can afford the repayments.

At NAB, we offer a no interest credit card, the NAB StraightUp Card, which works a little differently.

Learn more about how a no interest credit card works.

Who can apply for a credit card?

To apply for a NAB credit card, you must be:

  • 18 years or older

  • receiving a regular income

  • an Australian resident for tax purposes

  • an Australian or New Zealand Citizen, an Australian Permanent Resident or a non-resident holding an acceptable Temporary Residency Visa.

The following Visa categories are not acceptable:

  • Visitor Visa (exception, a Special Category Visa - NZ Citizen is acceptable), Working Holiday, Student, Exchange/gap year, Transit/short stay/seasonal and Bridging.

How to apply for a credit card

You can apply for a NAB credit card either online or at a NAB branch. To complete your application, you’ll need to have some of your documents and information ready. You’ll also be asked to set a limit for the amount of credit you want.

Learn more about what you need to have ready to apply.

If your application is approved, it’s then subject to verification. If you meet the verification criteria, you’ll receive your credit card in the mail within five working days. Once you activate it, you can start using it straight away.

How does a credit card work?

Your credit limit

Your credit limit is the amount you can borrow. When you apply for a credit card you can either set your own credit limit or the bank will set the maximum credit amount, based on the information you supplied about your financial situation. The bank will also set a minimum card limit, which depends on the type of card you apply for.

Interest rates

When you apply for a credit card you’ll be told which interest rate applies. This is an annual percentage that you pay, and it applies to any outstanding amount not paid off by the required due date. The amount of interest you’ll pay will differ each month. It’s determined by how much you spend, how much you repay, and when you repay it. For example if the interest rate is 18% per annum, and you have $100 outstanding on your balance, you will be charged 18% per annum of $100, or approximately $1.50 per month.

Interest-free periods

Most credit cards have ‘up-to-44 days’ or ‘up-to-55 days’ interest-free periods on purchases.  This means interest on amounts you owe doesn’t start to build up until the statement due date.

Interest-free periods usually start on the first day of your billing cycle, not when you make a purchase. For example, if your credit card has an interest free period of 44 days, this means you have 44 days from the day of your statement to pay the closing balance in full, or if your statement displays an interest free days payment, this amount in full. After this, you will be charged interest.

Note: Interest rates and interest-free periods don’t apply to a NAB StraightUp Card.


Once you have a credit card, like any debt, you need to pay it back. Your bank will send you statements each month which will show you the total amount you have borrowed, any payments you have made, the interest rate, any interest or charges that have accrued, as well as the minimum amount you have to pay.

To avoid paying interest, make sure you pay the closing balance in full by the due date each month. If you don’t pay the full amount of the closing balance, you will need to pay at least the minimum payment amount shown on your statement. If this amount isn’t paid by the due date, you may have to pay late fees or missed payment fees, as well as interest.

Balance transfer

A balance transfer is a way to move some or all of what you owe (your balance) on one or more credit cards to a new one. The debt you move to the new card usually has a much lower interest rate (or often no interest) than what you were previously paying, for a period of time. This is known as a promotion period and it’s usually between six months and three years. After this period, any unpaid balance transfers will attract the variable cash advance rate. 

Annual fees

Most credit cards have an annual fee, which is payable every 12 months. The annual fee will be charged within the first statement period (generally 30 days) of your card opening and after you’ve made your first purchase. Depending on which card you choose, you may pay a lower annual fee with one credit card when compared to another.

Monthly fees

The NAB StraightUp Card has a monthly credit card fee, rather than an annual fee. The amount of the monthly fee will depend on your credit limit.

Late payment fees

Most credit cards will charge a fee if your payment is late or missed. Learn more about how to avoid late payment fees.

Types of credit cards

Looking for a credit card but not sure what type? Learn about the differences between credit card types now.

Terms and Conditions

Fees and charges
Read our credit card terms and conditions. Fees and charges are payable. Approval and credit limit is subject to NAB's credit assessment criteria. Information, including interest rates and annual card fees subject to change. Correct as at 1 November 2023.

Target Market Determinations for these products are available at nab.com.au/TMD.

Credit cards issued by National Australia Bank Limited.