The Closing Balance vs the Minimum Monthly Payment

When you use your credit card to make purchases, then you’re essentially borrowing money from your credit card provider.

At ANZ, if you don’t pay your full Closing Balance (or if applicable, your ‘Adjusted Closing Balance’) by the due date shown on your statement each month, then you could be charged interest on your purchases balance^disclaimer.  Your Adjusted Closing Balance is calculated as your Closing Balance less the sum of any relevant Promotional Plan balances that relate to an Instalment Plan, a Buy Now Pay Later plan, or a Promotional Balance Transfer Plan. If you continually miss repayments, your credit rating could also be affected.

Here, we look at some key concepts relating to personal credit card payments and what they might mean for the bottom line.

The Closing Balance

This is the outstanding balance on the Credit Card Account at the end of the statement period and includes purchases, and other transactions and fees, made during the statement period. As well as showing your closing balance, the account summary on your ANZ statement will also show the ‘Opening Balance’, ‘Purchases, Cash Advances & Other Debits’, ‘Interest Charges’, ‘Payments & Other Credits’ and if applicable 'Adjusted Closing Balance'.

At ANZ, if your personal Credit Card Account has an interest-free period on purchases, you may be able to avoid paying interest on purchases by paying the full Closing Balance (or if applicable, your ‘Adjusted Closing Balance’) shown on your statement by the Due Date each month^disclaimer.

The Adjusted Closing Balance is calculated as your closing balance less the sum of any relevant Promotional Plan balances that relate to an Instalment Plan, a Buy Now Pay Later plan, or a Promotional Balance Transfer Plan, plus an instalments due (including instalments previously due which have not yet been paid).

To help you plan ahead, you might want to track the amount that you have spent on your credit card as you go. This could help you be more prepared to understand what you might owe on your credit card come statement time.

The Minimum Monthly Payment 

In addition to the Closing Balance, your credit card statement will also include a line showing the minimum amount you need to pay to meet the terms of your contract, aka your 'Minimum Monthly Payment'. 

If you have anything due immediately like overlimit or overdue amounts, these will be shown as well . You would need to pay these amounts immediately in addition to the Minimum Monthly Payment to avoid a late payment fee on your next statement^disclaimer.

Remember, if you ever only pay the Minimum Monthly Payment, you will end up taking longer to pay off your card and will accrue more interest than you would if you paid your Closing Balance on time and in full each month. Check the ‘minimum repayment warning’ on your statement to see an estimate of how much interest you could pay – and how long it could take to pay off the closing balance – if you only make the Minimum Monthly Repayment^disclaimer.

If you can’t pay the Closing Balance in full, but want to reduce the amount of interest you are charged, you can make a payment that is more than the Minimum Monthly Payment.

Remember that, by making a payment that’s less than the full Closing Balance, you may lose your interest-free period (if you have one) and you will generally be charged interest on your purchases balance from the day after the Due Date shown on that statement^disclaimer.

If you're worried about your credit card debt and your ability to make repayments, you should contact your credit card provider. They may be able to assist; and may have tools and resources to help relieve any financial stress.

If you are an ANZ customer having difficulty making credit card repayments, please contact us on 1800 252 845.

Getting into a routine with payments 

Whether you decide to pay off the full Closing Balance, the Minimum Monthly Payment (plus any overlimit amounts or overdue amounts) or an amount in between  – it’s important to ensure that you pay by the relevant deadline. On ANZ personal credit cards you need to have paid any amounts due immediately, and must pay the outstanding balance by the due date shown on your statement if you want to avoid being charged a Late Payment Fee. Learn more about the payment Due Date.