When it comes to understanding what a credit card is and how best to use it, knowing some of the key terms can help you have full confidence in your decisions and remove any confusion.
As the primary cardholder, you can allow another person to have a card on your account. The person who uses this card is called the additional cardholder. The primary cardholder is legally responsible for transactions made by the additional cardholder.
This is a fee you pay for having access to a credit card. The fee is usually payable once a year (on or around the date you first activated your card) and varies depending on the type of credit card.
From 1 December 2023, balance transfers will no longer be offered on our credit cards. Balances already transferred will continue on the promotional rate until the amount is fully repaid or the balance transfer period ends, whichever comes first.
An amount we pay to your credit or store card with another Australian financial institution or third party at your request. We may agree to charge a special interest rate for a set period on this amount.
Balance transfer interest
The interest charged for the money paid by balance transfer to your credit or store card with another financial institution.
Any money you access under your account, except a purchase or balance transfer, is a cash advance. Cash advances include:
- ATM withdrawals (including any ATM fee)
- Money withdrawn at a branch or other financial institution (if permitted)
- Transfers from your account using NetBank or the CommBank app (other than through BPAY)
- Any balance transfers (including interest on them), once any special interest rate period has expired
- Transactions for items we consider equivalent to cash, such as gambling, lottery tickets, money transfers or travellers cheques, including transactions which merchants tell us are for such items.
- Dishonoured payments
Cash advances attract a fee and interest from the date of the cash advance. There’s no interest free period on cash advances.
Cash advance interest rate
This is the interest rate charged on cash advances.
The total amount of money you owe on your credit card at the end of each statement cycle.
The maximum amount you can spend with your credit card is called your credit limit. If you want to, you can apply to increase (or choose to decrease) your limit at any time in NetBank or the CommBank app.
Your credit score (sometimes also called your credit rating) is based on your borrowing and repayment history – and includes how often you’ve shopped around for credit too.
Lenders will use this rating, alongside their own risk criteria, to decide whether to lend to you, how much and at what rate of interest.
CVC stands for Card Verification Code. It's a security code that's encoded or printed on your credit card. When you pay for something online, by mail order or over the phone you may be asked to quote the CVC to prove that you have the credit card in front of you.
Interest is what a borrower pays a lender for the use of their money. How much interest you’ll pay depends on the type of card you have, the transactions you make and when you make payments.
Interest free period
Most credit cards offer an interest free period on purchases up to a certain number of days. Your interest free period is the time between when you make a purchase and the due date for payment on your statement – as long as you pay the full amount owing by the due date and don’t already owe money on your credit card from a previous statement.
Late payment fee
You'll be charged a late payment fee if your credit card provider hasn’t received your minimum payment by the due date on your statement.
The minimum amount you must pay by the payment due date.
Each month you receive a statement, summarising your credit card account for that month. This includes:
- Details of all your transactions for that statement period
- Any interest, charges or fees
- Your opening balance
- Your closing balance
- The minimum amount due
- The payment due date
Payment due date
You’ll find the payment due date on your monthly statement and you must pay each minimum payment by its due date.
Personal Identification Number (PIN)
All credit and debit cards issued in Australia require a PIN to use.
Purchase interest rate
The purchase interest rate is the rate of interest charged when you use a credit card to buy goods and services, such as groceries from the supermarket, clothes from a store, paying bills or insurance.
How interest is calculated depends on the type of card you have, the transactions you make, and when you make payments.
A regular payment is when you set up an automatic payment for regular bills. By setting up a regular payment, you can pay bills automatically with your credit card, so you don’t need to worry about missing a payment.
The statement cycle is the time between the statement start date and the statement end date.