The minimum monthly repayment on a credit card is the lowest amount you have to pay to meet your credit agreement.

By paying this amount by the payment due date, you’ll avoid paying late fees, but you will still pay interest on the remaining amount owing.

How much is the minimum repayment?

The minimum repayment will differ depending on your credit card provider and the amount you owe. On CommBank retail credit cards the minimum repayment amount is the greater of:

  • Any amount you owe that exceeds your credit limit;
  • 2% of the closing balance, rounded down to the nearest dollar; or
  • $25

If you have a CommBank Business Card other than an Awards card:

  • The threshold amount is $75 (rather than $25); and
  • The minimum payment percentage is 2.5% (rather than 2%)

Should you repay more than the minimum repayment?

If you can, it’s best to repay as much of the amount owing as possible as this will minimise the amount of interest you’re charged and help you clear the balance sooner.

By making only the minimum repayment on your credit card from month to month, you may find that it takes a long time to repay the amount you owe and it will significantly increase the cost to you by charging you interest over this period of time.

If you’re able to pay the total amount owing on the credit card by the due date each month this will generally mean you can avoid paying any interest on purchases, as most credit cards come with an interest free period on purchases.

However, if you have had a cash advance during the statement period you are likely to still be charged interest on the cash withdrawn in addition to the cash advance fee. Cash advances are blocked on certain types of credit cards.

How to add to your repayments

If you’re finding it difficult to pay more than your minimum repayment each month, one of the first actions you can take is to reduce your spending on your credit card.

A budget can help you assess whether there are any areas of your life where you feel you are overspending and could reduce your spending.

As part of your budget, try and set aside an amount to repay your credit card balance each month and a date by which you would like to have repaid the balance completely.

You can use our repayment calculator to see how long it will take you to repay your balance.

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Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial advice.