Example: How to repay $1,500 credit card debt
Let's say you have a $1,500 outstanding balance on your credit card, which has an average interest rate of 19.94%.
- Pay off the entire balance: If you pay off your entire $1,500 balance, you will have no outstanding debt and not get charged interest.
- Make the minimum repayments: If you make the minimum payments on your card (paying $30 in the first month) it would take you 19 years to repay and you would be charged $3,612 in interest. And that's assuming you don't continue to spend with your card during that time.
- Increase your regular repayments. If you increase your monthly repayment to $100, you'd have your entire debt repaid in 1.5 years and be charged $207 in interest. Increase your repayments even more to $150 a month and you repay your debt in 11 months and only pay $124 in interest.
I am a new immigrant to Australian and do not have any credit history. I am considering building up a good one because I might need it for a car loan and/or mortgage sometime in the future.
Your article was helpful, but I do have some questions:
Does the credit history system work like that of the US, and what is the credit score range?
What would be ideal cards for a beginner that has no annual fees, with good rewards? The interest rate may not matter because I intend to pay my bill in full every cycle.
Thanks.
Ekene.
Hi Ekene,
Thanks for reaching out to us.
With regards to your query about the credit history, yes you need to have it for you to be able to apply for a credit card for your future use.
A credit score is a numerical representation of your credit history. Please feel free to learn more about how to improve your credit score and increase your chance of getting approved for any future credit applications you may make.
If this interests you, please consider requesting your credit report for free.
Simply add your phone number to get our Finder app and start requesting your credit score.
Alternatively, you can click on the “Continue on web” if you wish not to get your score through the app.
A pop-up window would appear. Click on the “Log in” tab if you already have a Finder account. Click on the “Register” tab if you wish to create a new account.
Once you’re in, you can then request your credit score.Hope this helps.
Best regards,
Rench
I am looking into applying for a credit card in Australia. I am currently receiving roughly 24k in welfare and am unemployed. I’ve never had a credit card before, nor have I known anyone who had one while I knew them.
I’d like to ask a couple of questions. First, about the interest. Does the interest accrue at a certain time in the month (or statement period), or does it accrue all the time except for specifically no-interest periods? For example, if I only made small purchases using it and could pay the entire balance back upon receiving the bill, would I have to pay the interest?
I would only want a small limit, so as to limit my spending and have it as a back-up in case my welfare for some reason doesn’t come in or is reduced temporarily. Are there any fees or penalties for not using it for a certain period of time?
Thank you :)
Hi Emily,
Thanks for reaching out to us.
Most low-income cards offer interest-free days on purchases, though the number of days (such as up to 55 days) would vary from card to card. To take advantage of these interest-free days, you have to pay your account’s closing balance completely every month. Please read more about what interest free period means for credit cards. After that, you can also explore low income credit cards and see which one would best fit your needs.
I hope this helps.
Cheers,
Rench
Alright… Really stupid here, don’t know anything about credit cards. And when I’m applying for them it asks for my card limit. I’m trying to find articles that explain it for a first-time user. Help?
Hi JJ,
Thanks for reaching out.
You may wish to check our guide about credit cards for beginners. This guide will tell you all you need to know about how credit cards work.
I hope this helps.
Cheers,
Ysa
Hi I need a credit card to hire a car in Spain what card would you recommend as I would only need to use it 2-3 times a year
Hi Sam,
Thanks for your inquiry.
Please check our credit card overseas use guide in comparing your options for credit cards that can be used overseas (or in Spain). Though I’m not sure if these cards we have listed will be accepted by your merchant (for car hire). It’s best to contact the car hire provider if they would accept these cards.
I hope this has helped.
Cheers,
May
If i bought a $3000 lawn mower what are some examples of what my payments would be
Random interest rates and min. Payments
Hi Justin,
Thanks for your inquiry.
Depending on whether the card has a promotional rate, you would be paying the purchase rate on the balance remaining. You can compare our range of 0% purchase credit cards to see your options. You can select the “Go to Site” button of your preferred credit card to proceed with your application. You can also contact the provider if you have specific questions. A gentle reminder, please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply.
Cheers,
Jonathan