Interest rates, fees and charges
It's okay to use credit, but the trick is to not think about it
as 'your' money. It's not. It's money you have borrowed that you
have to pay back with interest, fees and charges, which can add
Credit providers charge interest on the credit you use. Interest
is an extra amount you have to pay as a cost for borrowing. You pay
interest on the amount of money you owe, so the quicker you pay a
loan off, the less interest you pay.
Check the interest rate before you sign up for a credit card or
loan. With a credit card you should also check the interest rate
charged for late repayments (called default interest) as it is
often higher than the normal interest rate.
Some cards offer an introductory honeymoon interest rate but make sure you
know what the normal interest rate is and the fees and charges.
Find out about home loan interest rates.
Fees and charges are also often added to the cost of borrowing
money. Before you sign up for a loan or credit card you should
check the fees and charges as some credit providers have lower fees
and charges than others.
Fees can change at any time if the credit contract allows, so
make sure you read the updates you get from your credit provider.
Updated fees should also be on the company's websites.
If you're paying too much in fees and charges you should shop
around for the best credit deal.
If you want help comparing the features, fees and charges of
credit cards online see our webpage on using comparison
Some retailers may also charge a surcharge when you buy
something in their store or online using a credit card, so consider
whether other payment options might save you money.
Ban on excessive surcharge fees
From 1 September 2017 all businesses will be banned from
charging excessive payment surcharge fees on debit, credit and
prepaid card transactions. This means a business cannot charge a
customer more than what it actually costs them to process a
payment. These rules already apply to large businesses.
For more information see credit, debt and prepaid card surcharges
on the ACCC's website.
Find out more about fees charged on home loans.
Last updated: 09 Aug 2017