Credit Card Calculator

Take control of your credit card debt by working out a payment plan with this simple credit card repayment calculator.

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, updated on September 13th, 2023       

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It’s easy for credit card debt to creep up on you, which is why it’s important to keep an eye on it.  This credit card calculator will help you plan to pay off your debt within a set time frame.  Take control of your financial future with Savvy’s handy credit card interest calculator.

Credit card calculator explained

How do I use the credit card repayment calculator?

It’s quite simple to use the credit card calculator: just enter in your annual card fee, the annual interest rate and the balance outstanding on your card. 

Next, enter the minimum percentage repayment required, or alternatively the minimum dollar repayment, as well as your initial repayment, and click anywhere on the credit card payment calculator to see the results. 

If you’d like to see how to pay off your card more quickly, enter a higher repayment amount in the ‘choose higher repayment’ box and the credit card payment calculator will compare the length of time it’ll take to pay off your card at both the original repayment rate, and the higher rate.

You’ll also be able to see the total interest paid for the original repayment and also the higher repayment schedule.

How do credit cards work?

A credit card is a way to borrow money from a lender (up to a set dollar limit) with what’s called a revolving line of credit.  This means you can continuously borrow up to your limit and use your credit card to pay for purchases online, over the phone and in person.

Credit cards have set interest rates which you pay on any balance outstanding after the initial interest-free period (which ranges from 30 to 55+ days).  They usually come with an annual fee and you’re required to make a minimum monthly payment on your credit card if you are unable to pay off the debt on your card in full. 

Some credit cards also offer rewards points for every dollar spent.  These credit cards are known as rewards cards and the points accrued can be used to buy select goods and services from a catalogue or redeemed to pay for flights and other travel.

What different types of credit cards are there?

There are many different types of credit card available on the Australian market today, including:

  • No annual fee: as its name suggests, there’s no annual fee, but a slightly higher interest rate is typically charged.
  • Low interest: these charge a low interest rate, generally less than 14%, in addition to an average annual fee of around $30-$60.
  • Frequent flyer: this card type is linked to an airline’s frequent flyer program, such as Qantas or Virgin, and allows you to accumulate points to put towards future travel.
  • Travel card: they’re designed to offer low or no fees for overseas transactions and overseas ATM withdrawals, plus complimentary travel insurance is another common benefit.
  • Balance transfer card: these offer 0% interest if you transfer the balance of another credit card for a set period of time, before reverting to a higher interest rate.
  • Premium diamond, platinum or black cards: these typically have high annual fees of $400 or more and credit limits in the six figures in return for a premium number of frequent flyer points, free travel insurance, use of flight lounges and a host of other exclusive bonuses. Often minimum income requirements apply to these cards also, some of which are only available by invitation.

Top tips when choosing a credit card

Think about how you’ll use your card

The type of credit card that’s most suitable for you depends on how you intend to use it.  If you plan to pay off the balance of your card each month, you may be interested in cards that offer travel points and rewards, rather than a low interest rate.  On the other hand, if you have a large credit card debt, utilising a balance transfer card with a 0% interest rate for a set period may make the most sense.  Choose a card that fits in with your lifestyle and the way you intend to use your card.

Choose a card with as low a credit limit as possible

Be aware the credit limit on your credit card counts towards your overall debt, even if you pay your card off at the end of each month.  Therefore, it makes sense to have as low a credit limit as possible on your credit card, particularly if you are intending to apply for a home loan or a car loan in the near future.  Lowering your credit card limits can improve your credit score.

Make sure you get value for money with rewards points

Gaining rewards points each time you use your credit card may sound appealing, but it’s important to be aware of rewards schemes that simply aren’t worth the effort.  This may be due to:

  • points which expire before an average card user has time to save up a sufficient amount to redeem them on something worthwhile
  • rewards catalogue ‘bargains’ which require thousands of points for electrical goods worth a small amount at regular store prices
  • rewards seats on flights that are either very scarce or only offered on unpopular flights early in the morning or late at night

Plan to pay off your card in full each month

In September 2021, Australians owed over $35.2 billion on credit and charge cards, according to the Reserve Bank of Australia.  Over $18.9 billion of this debt was accruing interest, which is going straight into the pocket of the credit card companies.  If you’re going to use a credit card, make sure you pay the balance off in full each month so you’re not hit with expensive interest charges on your card.

More frequently asked questions about credit cards

What’s the difference between a credit card and a debit card?

A credit card allows you to accumulate debt up to the agreed limit on your card, which is frequently an amount from $1,000 to $5,000.  There’s no time frame for repaying this debt as long as you are able to afford the minimum monthly repayments.  A debit card doesn’t afford you any credit; you can only spend the amount of money you actually have in your debit account, although you can use your debit card the same way as a credit card to pay online and in person for purchases.

How do I qualify for a credit card?

An application for a credit card is easy to do online and typically only takes a few minutes.  To qualify for a credit card, you need to meet the following criteria:

  • be at least 18 years of age
  • be an Australian citizen, a permanent resident or hold an appropriate residency visa
  • have a reasonable credit history
  • be able to meet any minimum income requirements
How long does it take to get a credit card?

Credit cards are usually issued very quickly, so you can expect to receive your new card within a week of ordering it, although you should allow up to 14 days for your card to arrive in the mail.

What should I do if I lose my credit card?

If you lose your credit card or if it’s stolen, you must report the loss to your card provider as soon as possible.  You may be liable for any loss you suffer before you report your credit card missing.  Your provider will immediately cancel your card and issue you with a new one, so you’ll need to update all your direct debits and automatic payments linked to your old card.

Is credit card insurance a good idea?

Credit card insurance protects you from having to make credit card repayments if you suddenly lose your job (through no fault of your own) or because of accident or illness.  It also covers your loved ones in the case of your death, so they would not have to pay off your credit card debt if you were to suddenly pass away.  However, be aware that credit card insurance is costly and may not be worth the cost for many Australians, so you should closely assess insurance options before taking out a policy.

How will my new credit card affect my credit rating?

If you pay off your credit card regularly and on time each month this will help you to establish a positive credit record.  Applying for a credit card with a low credit limit, such as $1,000, is a good way for a young person to start to establish a good credit history.  Use Savvy’s credit card interest calculator to work out how long it will take you to pay off your card if you pay the minimum monthly balance, and make sure you always pay the minimum payment on your credit card on time.

Can I get cash out with my credit card?

You can withdraw cash from your credit card, but it’s not a wise way to use your card as there are often very high charges for cash withdrawals from credit cards, typically $3 to $5 per withdrawal. Also, you’ll be charged interest on the cash advance, with no interest-free period applicable.

Can I get a joint credit card with my partner?

In the past, lenders did offer joint credit cards, although they’re very rare these days.  Another way for two people to share one credit card account is for one person to be the cardholder and another to be an authorised user with their own card.  In this way, two people can use the same account, although only one is officially responsible for payment of the credit card debt.  Make sure you always pay the minimum payment on your credit card on time to ensure your card doesn’t negatively affect your credit score.

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