Understand how credit cards work
Credit cards are easy to get and easy to use. They let you carry
less cash and buy things over the phone or online. But keep track
of your spending and make sure you can pay off what you owe.
How do credit cards work?
Credit cards allow you to borrow money up to a certain limit as
long as you make regular minimum repayments. Most credit cards have
an annual fee.
Credit card interest rates explained
Credit cards tend to have higher interest rates than other forms
of credit, and the rate can vary depending on what features the
card offers. You are charged interest on all
outstanding transactions if you don't pay your full balance each
If you have a credit card without an interest-free period, you pay interest
either from the day you make a purchase or from the day your
monthly statement is issued.
Unless you use a card that is interest-free and fee-free, buying
items with a credit card will always cost you more than if you pay
Credit card minimum repayments
If you make only the minimum repayment on your credit card each
month, you will pay more in interest and it will take longer to pay
off your balance. Your monthly statement must give you information
about how long it will take to pay off the entire balance by making
Find out how much you can save by paying more than the minimum
Credit card calculator
Stopping unsolicited credit card offers
Credit card issuers are no longer allowed to contact you in any
way (including in writing, by phone or online) to offer to increase
your credit limit - even if you previously opted to receive these
offers. This applies to both new and existing credit cards.
If you want to increase your credit limit, you can ask your card
issuer to do this at any time.
You could also end up spending more than you can repay if you get
a higher credit limit than you need.
Dual network cards (credit and
Some credit cards can also be linked to your deposit accounts
and used as a debit card.
If you want to pay by debit
you should insert your card into the EFTPOS machine at the checkout and select
'SAV' or 'CHQ'.
If you want to pay by credit you can either tap
or wave your card over the payment terminal (if you have a
contactless card) or you can insert your card into the EFTPOS
machine and select 'CR'.
If you use your card on a contactless terminal (PayPass or
payWave) you will always be paying by credit.
Using your credit card PIN
You must enter a PIN to authorise transactions on credit card
and debit card purchases when you buy a product at a point of
This doesn't apply to online shopping, telephone purchases or
contactless card transactions such as Visa's payWave and
MasterCard's PayPass where you wave your card or tap and go.
Your signature is no longer accepted as authorisation for point
of sale purchases in Australia if the card you're using has an
embedded smart chip. You'll continue to sign when using chip-less
cards with a magnetic strip at the back (such as some pre-paid
cards and gift cards).
Using a credit card overseas
Be aware that your PIN might not work when you use your credit
card overseas. Depending on the overseas merchant, you may need to
use a signature to authorise purchases.
Problems with your credit card PIN
Forgot your credit card PIN?
If you forget your PIN, contact your bank or card issuer to
organise a new one. Your PIN should be difficult to guess and not
associated with any known information about you.
Using a credit card with a disability
If you have problems remembering a PIN or have a disability that
makes signing your credit card difficult, contact your card issuer
to discuss your options.
If you have questions about the security of using a PIN, speak
to your card issuer.
See unauthorised and
mistaken transactions if you have purchases on your card that
you cannot account for.
How to choose a credit
See how to choose a credit card
for tips on how to decide which credit card is right for you.
See smart ways to use your
credit card for tips on how to make your credit card work
better for you and avoid costly fees and interest. You can also
find out how to pay off
multiple credit cards.
If you're worried about spending too much, a debit card might
suit you better.
Remember to check your credit card statements carefully to make
sure you are being charged correctly. Contact your credit provider
immediately if you find any transactions you didn't make. See unauthorised and
mistaken transactions for more details.
Shop around for a credit card that's right for
you, and remember to check the fine print.
Last updated: 25 Sep 2018