What is a credit card?

A credit card is a way to borrow money or get ‘credit’ from a bank. 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 only apply for a credit card if you can afford the repayments.

Learn more about if a credit card is the right option for you, and how to get a credit card. 

Credit versus debit cards

A credit card allows you to borrow and spend money up to your approved credit limit. With a debit card, you’re spending your own money. A debit card is linked to your everyday transaction account, so you can only spend what’s in the account. If you’re worried about overspending, a debit card might be a better option for you.

You can also use the Spending tool in the NAB app to track where your money is going, and you can set a savings goal with My Goals.

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 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 date on your statement to pay the closing balance before incurring 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. 


Depending on which credit card you choose, you may need to pay fees. Many credit cards charge an annual fee, which has to be paid every 12 months. Other cards may charge a monthly credit card fee, rather than an annual fee. Most credit cards also charge a late fee if you don’t make your repayments on time. Learn more about credit card fees and ways you can avoid them.

Types of credit cards

There are many types of credit cards available, including low rate cards, low fee cards, and cards that allow you to earn rewards points. Learn more about the different types of credit cards you can apply for. You can also use our credit card selector to help you choose the right card for you.

How can I get a credit card?

To be approved for a credit card, you’ll need to meet certain eligibility criteria regarding your age, income and residency status. The bank will also run a credit check to assess your credit history and credit score. There are a number of ways you can build and improve your credit score:

  • Pay bills on time

  • Make loan repayments on time

  • Limit the number of credit applications you make

  • Grow your savings

Learn how to improve your credit score before you apply for a credit card, and why creditworthiness is important.

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 how to apply for a credit card and what documents you’ll need.

  • Approval for a credit card depends on our credit assessment criteria. Learn more about creditworthiness and what we look at during applications.

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 three to five working days. Before it arrives, you can go card-less and make payments with your smartphone by activating your card in Google Pay or Apple Pay.

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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 13 February 2024.

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

Credit cards issued by National Australia Bank Limited.