How do credit cards work?

In bankspeak, it’s called a ‘revolving line of credit’. This just means it’s a card with a set amount of funds (we call that a ‘credit limit’) that you borrow from a bank and can use anytime.

When you use your card to make a purchase, you then need to pay it back. You’ll be charged interest on the amounts you don’t pay back each month, there’s a minimum monthly repayment to avoid a late fee, and some cards will have an annual fee.

Before you apply for a credit card, make sure you’re comfortable making your repayments.

We’ll send you a statement each month showing the amount you've spent and any fees or charges accrued that month. It’ll also show your minimum payment amount, amount due immediately (if any) and due date.

You can either:

• Pay your entire closing balance. This means you avoid any purchase interest and payment fees, and you’ll keep any interest free periods.
• Pay your minimum payment amount and any amount due immediately so you're not charged a late payment fee
• Pay something in between. If you pay anything less than your closing balance, purchase interest will be charged on the remaining balance (minus any balance transfers, promotional offers or Easy Instalments) and you’ll lose any interest free periods.

If you can, aim to pay off your entire balance to avoid having to pay interest on your purchases.

• In the Bankwest App: go to ‘Accounts’, choose your credit card account and tap ‘Manage’, then tap ‘Pay’ next to 'Statement balance'.
• In online banking: go to ‘Payments & transfers’ > 'Make a payment', then click ‘Internal Transfers’ to transfer the desired amount from one of your Bankwest accounts to your credit card account.
• Over the phone: give us a call on 13 17 19 and select the ‘self-service phone banking’ option. Make sure you’ve got your statement and your account details handy.
• In person: pop into your nearest branch with your statement and we’ll help you out.
• Using BPAY^®: make a BPAY payment using the payment details on your credit card statement
• Bank@Post: Payments can be made by cash or cheque at your local participating Post Office. Find the closest Bank@Post location to you on the Bank@Post website. 1 Bank@Post is an agency service provided by Australia Post on behalf of Bankwest. Bank@Post is available at participating Post Offices. Services available are cash withdrawals, deposits, balance enquiries and credit card repayments. Limits apply. Close

• Consider setting up a direct debit at least for your minimum repayment amount each month so you're covered in case you forget – that way you get to avoid late fees. Start by completing a direct debit request form.
• Schedule a repeating payment for a fixed amount and date in the Bankwest App or online banking.
• If you set up Easy Alerts, you can opt to get a push notification when your minimum repayment is due. Simply log in to the Bankwest App, go to 'More' > 'Notifications' > 'Settings' and switch on Easy Alerts. You'll be able to choose which notifications you want to receive.
• Set up payment reminders and we'll send you an email to let you know when a new Statement is available.

You’ll find the full list of fees you might be charged in the T&Cs, but here’s some of the more common ones.

Most cards will have an annual fee. As a general rule, the more features a card has – like rewards programs, complimentary insurance or fee waivers – the higher the annual fee will be.

If you don’t make your minimum monthly payment on time, you’ll be charged a late fee. If your statement refers to an “Amount Due Immediately” you must also pay that amount by the due date, in order to avoid the fee.

If you withdraw cash from your credit card at an ATM or a branch, or if you use your credit card to buy cash equivalent items like travellers cheques, it’s called a cash advance. You’ll be charged interest (cash advance rate) and a fee (cash advance fee) when you make one.