To make sure you’re using your credit card as effectively as possible, it’s a good idea to understand how your repayments are applied to any money owing.

It’s ideal to pay your statement closing balance in full. If you do this, you don’t need to worry about where the repayment goes first.

If you’re not able to pay the statement balance in full, your repayment will be allocated to part of your balance.

What kinds of transactions make up your balance?

Your credit card balance may be made up of transactions such as purchases, cash advances and balance transfers. Each of these may attract a different interest rate. So, where does your repayment go to first?

1. Monthly SurePay instalment payments

If you have a SurePay instalment plan, any payments you make are always applied first to the current monthly instalment/s, even where you have other balances with higher interest rates such as cash advances or purchases not in a plan. If you have multiple plans, we apply payments to plans in order of highest to lowest interest rate, or if all plan interest rates are the same, from oldest to newest. If this arrangement no longer suits you, you may cancel your plan at any time. 

2. Debt with the highest interest rate

Credit providers in Australia, such as CommBank, apply your repayment to the debt with the highest interest rate (as at the statement date) first – unless you have made an agreement otherwise, for instance if you have set up an instalment plan. This enables you to save money on interest charged by helping you reduce the debt with the highest interest rate first.

Some credit providers may have a different repayment arrangement for credit card accounts opened before 1 July 2012.

3. All other debt

Once the debt with the highest interest rate is repaid, repayments are then applied to the next highest interest rate from the statement period, and so on until all outstanding non-instalment plan balances are paid. Any remaining payment amount will be applied to the next monthly instalment payment/s due on your remaining instalment balances.


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 product advice. You should consider seeking independent financial advice before making any decision based on this information.