Interest and how it is charged
The amount of interest you are charged depends on the APR on your card and how you use your card. Typically, the interest rate on credit cards ranges from 11% to 19%, sometimes well above that charged on overdrafts and personal loans. Use our credit card cost comparison to check current rates of the main providers.
- If you pay your bill in full before the due date you will not be charged any interest. This is called the 'interest-free period'. This varies from one credit card provider to another but is generally about 56 days. Be aware, however, that most credit-card providers don't offer an interest-free period for cash withdrawals so you will be charged interest from the date you withdraw the cash.
- If you only pay off the minimum repayment it will mean you will pay more in interest and it will be harder to reduce what you owe on your card - unless you start to make larger regular payments to reduce it.
- If you pay off part of the bill, you will very likely be charged interest on all your purchases from the day you bought them. For example, if your statement shows you owe €1,000 and you pay off €900 by the due date, most providers will charge you interest on the full €1000 until the date your payment reaches your account. After that date, you will be charged interest on the €100 that remains unpaid and on any new purchases you make. You should check with your provider first to see how interest is charged on your card and read your terms and conditions very carefully.
- If you use your card for purchasing and withdrawals, you can see from our credit card cost comparison, providers usually charge different rates depending on whether you use your card for purchases or cash withdrawals. If you are in the habit of using your card for both and/or carrying over outstanding balances regularly, then check the terms and conditions of your agreement with your provider so you can work out how you are charged. You may get a better deal elsewhere, so if you are not happy, see if your provider is willing to negotiate a better rate with you or else considerswitching.
