For organisations to profit from and cover the risks involved in lending credit, they will charge you interest, fees and charges.

Interest may be calculated on either the amount of money you have borrowed or the outstanding balance. Your balance can include accumulated interest, which means you might find yourself paying interest on interest.

Generally, the more money you borrow, the longer it takes to pay off and the more interest you accrue.

Usually you will have to pay fees and charges as well as interest. Fees and charges can include:
  • account keeping fees (annual and monthly fees)
  • administration fees
  • redraw fees
  • early repayment/exit fees. 

To find out the real cost of your credit, enter your details into the Credit Card Cost Calculator.