Understanding the way Interest works on Credit Cards

Interest free days vs No free days

Credit Cards can be a useful tool as an emergency backup, but to use them to your full advantage it is vital to have a good understanding of how credit card interest charges.

Cards usually come with either “up to x days” interest free on purchases, or a no interest free period.  So what’s the difference?

To use our cards as an example, we have an “up to 55 days interest free” card (Visa Classic) and a Low Rate Visa card with no interest free days on purchases. The Visa Classic allows you to potentially have 55 days of no interest charged on a purchase if you pay the full balance of all purchases owing every month.  But, be aware. It doesn’t mean you get 55 days interest-free from the moment you buy something. The “55 days” refers to from the start of your statement cycle to your statement’s due date. So if you buy something on the day your statement cycle starts you will have 55 days interest free until your next statement bill is due (as long as you pay it in full). If you buy something 10 days after the billing cycle you will get 45 days interest free, and so on. So you could get between one day interest free, and a maximum of 55 days interest free.

The main advantage with this type of card is that if you pay your balance owing in full every month, you are getting an interest free revolving credit fund. But if you don’t pay your bill in full each month, interest charges will apply on items from the date of purchase.

Our Low Rate Visa on the other hand, calculates interest from the day you make a purchase until you pay it off, however the interest rate is considerably lower than the interest free period card. This type of card is a big advantage if you are not able to pay your balance owing in full every month.

All credit card statements include a repayment table which outlines the interest and time frames anticipated when only paying the minimum repayment on your account.

This is a great indicator of the true cost of your card, so keep this in mind when making large purchases that you can’t repay in full at the end of the statement period.

Cash advances (withdrawing cash from your credit card) aren’t considered a purchase so no interest-free days apply, no matter what type of credit card you have.

Our website gives all the great features and benefits of our Visa Classic and Low Rate Visa card.

Speak to our lending officers on 1300 65 65 81 or enquire now to get the card that best suits your needs today.

Paper or Plastic?

Personal Loans v’s Credit Cards

Personal loans and credits card, at a basic level, offer the same thing: the ability to access borrowed funds. The critical difference is in how these funds are accessed and repaid, which means while personal loans and credit ultimately do the same thing it’s still worth seeing which best suits your situation.

Read more…

The importance of having adequate insurance

Do you have adequate insurance?

No one wants to consider the prospect that their home or personal possessions could suddenly be destroyed, damaged or even stolen. But imagine the heartbreak of realising you weren’t covered for the cost of rebuilding or replacing treasured items should tragedy strike.

Read more…

Gearing for success – Not all debt is bad

Many of us have borrowed at one time or another for our larger purchases, like a holiday or a car. However, when done sensibly and with careful planning there are cases when borrowing to invest can be even more worthwhile.

Gearing is a sophisticated investment technique and is not suitable for everyone. We recommend you speak with a Bridges financial planner. Here’s a quick run down of positive and negative gearing. 

Read more…

Do you need to be retired to access your super?

Apart from perhaps the family home, super is the biggest asset that most people will ever have. Unlike other assets and investments, however, the principle of super is that it should be preserved for retirement and not frittered away. While this generally makes good sense, life is not always so straightforward and there are times of need where you or your family could benefit greatly from gaining access to your super. So how flexible is the system and what are the rules around early access? Here’s a quick guide to the possibilities.

Read more…

Are you making smart financial choices?


Making smart financial choices can be difficult. You need to consider tax laws, super rules, Centrelink – and the list goes on. What’s more, once you’ve made your choice you’re usually stuck with the outcome, for better or worse.

Imagine if you could easily go back and try again if you weren’t happy with the outcome of your choices. That’s exactly what the Choices interactive experience allows you to do.

It gives you the opportunity to put your financial know-how to the test by helping five animated couples make smart financial choices when facing realistic scenarios.

Meet the couples

Bruce and Shelley. Try to keep their age pension

From 1 January 2017 the Centrelink assets test for the age pension is changing and many people are set to lose all or some of their benefits if they don’t reduce their assets.

Should Bruce and Shelley go on a holiday or gift some money to their child? Or perhaps they should renovate their house or transfer some money to super? You choose!

Natalie and Carlos. Mortgage paid off, now what?

Mortgage repayments are most people’s biggest expense so when it’s paid off the extra money is a big bonus. What would you choose? Splurge it or save it?

Tina and Dave. Coping with costs after an injury

Most people have insurance as part of their super plan but don’t know what it covers, if it’s enough and any restrictions that may apply. See what happens to Tina and Dave when they find themselves in some very unfortunate circumstances.

Carol and Chung. Timing their retirement

Deciding when to retire involves thinking through many factors including tax, super, cash flow and, of course, doing the things you’ve always wanted.

Should Carol retire at 57 or 60? And should she take her super as a lump sum or a pension? See how Carol’s decisions not only affect their finances but their lifestyle goals too.

Jen and Tom. Moving into Aged Care

There comes a time when empty nesters consider downsizing. For some, this will mean moving into more suitable accommodation for health or age reasons.

Help Jen and Tom with their living circumstances including decisions around Tom’s move into Aged Care accommodation. Should they sell or keep the family home?

Take the challenge

Visit the Choices interactive experience today and see how you go helping one, or all, of these animated couples make smart financial choices. You’ve got nothing to lose and everything to gain.


Take the next step

To discuss the complex financial choices you’re facing, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice. Bridges has been helping Australians prepare for their retirement for 30 years.

A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances, to help you achieve your goals, both in the lead up to retirement and during retirement.

To make an appointment with a Bridges financial planner, call 1300 65 65 81. The initial consultation is complimentary and obligation free.

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.
This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent. In referring members to Bridges, Northern Inland Credit Union does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.
Examples are illustrative only and are subject to the assumptions and qualifications disclosed.
Part of the IOOF Group.