nab - Facts about credit card interest

Applicable to:

• NAB Credit Card Terms and Conditions

• NAB American Express Terms and Conditions

• Velocity NAB Credit Card Terms and Conditions

• NAB Qantas Credit Card Terms and Conditions

This document provides an overview of interest and how it is

charged to your NAB Credit Card account. It isn’t intended as a

complete explanation and it doesn’t form part of your credit card

contract, but is a good reference guide.

For a full explanation refer to your Credit Card Terms and

Conditions booklet.

What is interest?

Interest is a charge for providing credit. All NAB Credit Card accounts have an annual percentage

rate (interest rate). The applicable Terms and Conditions describe how interest is applied on a

credit card account.

The annual percentage rate differs from product to product and different rates can be applied

to the different types of transactions. For instance, some NAB products may have a different

purchase rate and cash rate, or you may receive a special rate for a balance transfer. All of this

is applied to the account’s monthly aggregated balance to calculate the interest charge.

Interest charged by NAB can be divided into four categories

Purchase interest – is interest charged on purchases such as buying food from the

supermarket, paying bills or direct debits such as gym memberships or insurance premiums.

Cash interest – is interest charged on cash transactions such as ATM withdrawals, fund

transfers to another account using NAB Internet Banking or NAB Telephone Banking,

traveller’s cheque purchases, and bills paid over the counter at a bank, financial institution

or post office.

Special interest – is interest charged on other amounts, such as balance transfer amounts

from non-NAB credit cards or transactions that are part of a specific promotion.

Interest on interest – is interest charged on interest charges shown on a statement

which are outstanding and generated by the three categories above.

Additional interest is charged on any interest charges which are outstanding from the

last statement period.

How is interest calculated?

Interest for a statement period is calculated by applying the relevant daily percentage rate(s)

(the account’s annual percentage rate/s divided by 365) to the total “aggregated balance” of

the account for that period. The daily percentage rate(s) can be found on your card account

statement.

This means that the aggregated balance includes purchase, cash advance and special balances,

and any interest charges shown on a statement which are outstanding.

Interest on each component (purchase, cash, and special) is calculated separately and then

added together. Interest that is shown on a statement which is outstanding is calculated on each

component at the rate applicable to that component.

Fees are not included in the aggregated balance and are not subject to interest charges.

Aggregated

balance

Daily % rate

(Annual % rate / 365)

Monthly

interest charge

X =

When is interest charged?

If interest is charged on your account it will be debited on the last day of your statement period.

The first and last day of each statement period is shown on your monthly credit card account

statement.

When is purchase interest charged?

If the account has an interest free period, and the closing balance of the credit card account

is not paid in full by the payment due date each month, interest on purchase transactions is

calculated from the day the transaction originally took place until the end of the statement

period .

If the account doesn’t have an interest free period, interest on purchase transactions is

calculated immediately i.e. generally the date the transaction takes place, and billed at the

end of each statement period. Purchase interest is calculated daily until the transaction is

paid off in full.

When is cash interest charged?

Interest on cash transactions, such as cash advances, is calculated immediately i.e.

generally the date the transaction takes place, and billed at the end of each statement

period. Cash interest is calculated daily until the transaction is paid off in full.

When is special interest charged?

The interest rate and its applicable period will differ depending on the promotion and any

amounts remaining unpaid will defer purchase interest rate after the promotional period ends.

What is an interest free period?

This is a feature of some NAB credit cards which provides the opportunity to avoid paying

interest on purchase transactions, by paying the account in full by the specified payment due

date each month.

If your card has an interest free period, no interest will be charged on a purchase if:

• You pay the full closing balance by the payment due date for the statement on which the purchase is listed: and,

• You have paid the closing balance of the previous statement by its payment due date.

For example, the maximum interest free period for a NAB Low Rate Visa Card is 55 days – 30

days being the length of a normal statement period, and then 25 additional days between the

last day of the statement period and the payment due date in which to pay the account in full

to avoid purchase interest.

Note that if you did not pay the closing balance on your previous statement in full by the

payment due date, your current statement will include interest charges for the outstanding

balance, as well as any new transactions made since the closing date on that statement.

When do I need to make repayments?

You must pay at least the “minimum payment” listed on your statement by the specified

payment due date. Of course, you may always pay more than the minimum payment, and

additional payments can be made at any time.

If your statement has a closing balance of less than $10, the minimum payment will be the

closing balance.

When will interest stop being charged to my account?

Interest is charged to your account up until the full payment of the statement closing balance

is received. Interest does not stop accumulating at the statement closing date it continues to

aggregate from the statement closing date until the date that the closing balance is paid in full.

While paying the card account in full by the payment due date will enable you to take advantage

of the card’s interest free period (if applicable), a final interest charge will still appear on your

next statement. This charge will relate to any outstanding balance that remained unpaid from

the close of the previous statement period up until the date it is paid in full.

If you then continue to pay the full balance by the payment due date on your account, each

month, then no purchase interest will appear on future statements.

Cash advances are charged interest at the applicable cash rate (as shown on your statement)

from the date assigned to the cash transaction was made, until it is paid in full. There is no

interest free period on cash advances.

How are payments applied to my account?

From 14 January 2011, when you make a payment to your NAB Credit Card account, the

payments will be allocated in the following order:

• Interest charges and fees and charges shown on a statement.

• Cash advances and purchases (based on highest to lowest annual percentage rate) shown on

a statement.

• Cash advances and purchases (based on highest to lowest annual percentage rate) that have

not appeared on a statement.

• Payment of any other amount owing on their account.

Frequently asked questions

What if I pay the entire statement closing balance by the payment due date each month?

If you have a NAB credit card account with an interest free period, you won’t pay any interest

on purchases. If, however you make a cash advance or cash equivalent transaction, you will

be charged interest from the date of the transaction until you pay in full.

Example 1: Full payment received by payment due date

May 2010

Statement Period 10 April 2010 9 May 2010

Your Account Summary

Balance from previous statement $0.00

Payments and other credits received $0.00

Purchases, cash advances $43.50 DR

Interest and other charges $0.00

Closing Balance $43.50 DR

Payment Information

Monthly payment due by 23 May 2010 $10.00

Minimum Payment $10.00

Your Transaction Record

Date Details Amount Balance

10/04/10 OPENING BALANCE $0.00

04/05/10 GROCERIES $43.50 $43.50

End of statement

June 2010

Statement Period 10 May 2010 9 June 2010

Your Account Summary

Balance from previous statement $43.50 DR

Payments and other credits received $43.50 CR

Purchases, cash advances $315.77 DR

Interest and other charges $0.00

Closing Balance $315.77 DR

Payment Information

Monthly payment due by 23 June 2010 $10.00

Minimum Payment $10.00

Your Transaction Record

Date Details Amount Balance

10/05/10 OPENING BALANCE $43.50 DR

20/05/10 PAYMENT $43.50CR $0.00

01/06/10 GROCERIES $57.70 $57.70

01/06/10 PETROL $160.15 $217.85

02/06/10 HARDWARE STORE $49.37 $267.22

03/06/10 LIFE INSURANCE $48.55 $315.77

End of statement

July 2010

Statement Period 10 June 2010 9 July 2010

Your Account Summary

Balance from previous statement $315.77 DR

Payments and other credits received $315.77 CR

Purchases, cash advances $459.79 DR

Interest and other charges $0.00

Closing Balance $459.79 DR

Payment Information

Monthly payment due by 23 July 2010 $11.49

Minimum Payment $11.49

Your Transaction Record

Date Details Amount Balance

10/06/10 OPENING BALANCE $315.77 DR

20/06/10 PAYMENT $315.77CR $0.00

23/06/10 GROCERIES $42.50 $42.50

25/06/10 CAR INSURANCE $242.29 $284.79

28/06/10 HOTEL $175.00 $459.79

End of statement

Due date for payment was 23 May 2010.

Payment of the previous closing balance was received in full by the

payment due date, so no purchase interest was charged.

Due date for payment was 23 June 2010.

Payment of the previous closing balance was received in full by the

payment due date, so no purchase interest was charged.

What if I don’t pay the entire closing balance by the payment due

date every month?

If you have a NAB credit card with an interest-free period, you’ll

be charged interest on purchases and cash transactions for that

statement period, as well as on any new transactions made since

the end of that period. This will continue to happen on future

statement periods until your closing balance is fully paid in full on

or before the payment due date of the latest statement.

If you don’t have a credit card with an interest-free period, interest

is calculated daily on all transactions regardless of whether you pay

the entire closing balance by the due date. Interest charges

are debited to your account on the closing date of each statement

period.

Example 2: Full payment not received by payment due date

What if I pay the entire closing balance a few days after the

payment due date?

If you have a credit card with an interest-free period and you haven’t

paid the entire closing balance by the payment due date, you

will lose the interest-free benefit for that period. You may also be

charged a late payment fee.

May 2010

Statement Period 10 April 2010 9 May 2010

Your Account Summary

Balance from previous statement $49.41 DR

Payments and other credits received $49.41 CR

Purchases, cash advances $43.00 DR

Interest and other charges $0.00

Closing Balance $43.00 DR

Payment Information

Monthly payment due by 23 May 2010 $10.00

Minimum Payment $10.00

Your Transaction Record

Date Details Amount Balance

10/04/10 OPENING BALANCE $49.41 DR

22/04/10 GROCERIES $43.00 $92.41

23/04/10 PAYMENT $49.41CR $43.00 DR

End of statement

June 2010

Statement Period 10 May 2010 9 June 2010

Your Account Summary

Balance from previous statement $43.00 DR

Payments and other credits received $20.00 CR

Purchases, cash advances $43.00 DR

Interest and other charges $1.46 DR

Closing Balance $67.46 DR

Payment Information

Monthly payment due by 23 June 2010 $10.00

Minimum Payment $10.00

Your Transaction Record

Date Details Amount Balance

10/05/10 OPENING BALANCE $43.00 DR

11/05/10 PAYMENT $10.00CR $33.00

19/05/10 PETROL $43.00 $76.00

01/06/10 PAYMENT $10.00CR $66.00

09/07/10 INTEREST ON PURCHASES $1.46 $67.46

End of statement

July 2010

Statement Period 10 June 2010 9 July 2010

Your Account Summary

Balance from previous statement $67.46 DR

Payments and other credits received $67.46 CR

Purchases, cash advances $43.50 DR

Interest and other charges $0.48

Closing Balance $43.98 DR

Payment Information

Monthly payment due by 23 July 2010 $10.00

Minimum Payment $10.00

Your Transaction Record

Date Details Amount Balance

10/06/10 OPENING BALANCE $67.46 DR

21/06/10 CAR INSURANCE $43.50 $110.96

23/06/10 PAYMENT $67.46CR $43.50

09/07/10 INTEREST ON PURCHASES $0.48 $43.98

End of statement

Note: for the summary of how interest is calculated for these examples see next page.

Frequently asked questions

Frequently asked questions

The tables below represent the summary of how interest is calculated for the examples on previous page.

June Statement

Date Transaction Amount Balance (purchases) No. of Days Aggregated Balance

22/04/10 GROCERIES $43.00 $43.00 19 817

11/05/10 PAYMENT -$10.00 $33.00 8 264

19/05/10 PETROL $43.00 $76.00 13 988

01/06/10 PAYMENT -$10.00 $66.00 9 594

TOTAL 2663

Closing balance on 9 June was $43.00. Payment received on 15 May was $10.00. The table shows show interest is

charged on the aggregated balance of purchases for the period. Because the June statement was not paid in full

by the due date, this also includes any new transactions since the start of the July statement.

Interest charged = Aggregated Balance (2663) x Daily Rate (e.g. 0.0547%) = $1.46

July Statement

Date Transaction Amount Balance (interest) Balance (purchases) No. of Days Aggregated Balance

10/06/10 OPENING BALANCE $67.46 $1.46 $67.46 13 877

23/06/10 PAYMENT -$67.44 $0.00 $0.00 17 0

TOTAL 877

Closing balance on June statement was $67.46. Full payment was received by payment due date (23 June 2010).

Interest charged = Aggregated Balance (877) x Daily Rate (e.g. 0.0547%) = $0.48

Examples based on Annual Percentage Rate of 19.97%p.a.

For any additional questions regarding

your specific product, please call

Any NAB Platinum Card

1300 730 213

24 hours, 7 days

Any NAB Gold Card

1300 650 456

between the hours of

7:am - 9:pm AEST/AEDT,

Monday to Friday

8:00am - 6:00pm AEST/AEDT,

Saturday and Sunday

Any other NAB Card

13 22 65

between the hours of

7:am - 9:pm AEST/AEDT,

Monday to Friday

8:00am - 6:00pm AEST/AEDT,

Saturday and Sunday

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