Did you know that your statement has information to assist you to manage your account?
Your statement requests for a minimum repayment amount each month. This must be paid by the due date to avoid late fees and being overdue. However, only paying the minimum each month may mean your credit card balance will take longer to be paid off.
The Managing your repayments section provides a long-term view of your repayments. With it, you can better understand how paying above your minimum payment each month makes a difference.
The Minimum Repayment Warning shows you how long it’ll take to pay off your credit card closing balance if you paid only the minimum repayment amount each month. It also shows you how much you would need to pay each month to pay off the closing balance in two years, including how much interest you can save. Note: This forecast is based on your current balance and does not consider future purchases or fees.
You can opt to make additional repayments when you can to minimise the amount of interest you pay.
Why is it an estimate for 2 years?
Latitude and other credit card providers are required to show the Minimum Repayment Warning, including how much you need to pay each month to pay your account off in 2 years.
Why doesn’t the Minimum Monthly Payment pay my account off within 2 years?
Great question. When you carry a balance and interest is charged, the Minimum Monthly Payment will pay the interest and account servicing fee charges before reducing your balance. You are required to make this Minimum Monthly Payment to avoid late fees and ensure you don’t go overdue.
Why is it a warning?
It is a warning because when you choose to carry a balance, interest is charged and over time, it can be quite costly. By referencing the Managing your repayment table, you know how much you should budget to pay your account off faster and how much you can save.
When would I pay my balance off faster than the amount in the 2 year estimate?
If you have an Equal Monthly Payment (also known as Instalment Interest Free) plan where you have agreed to pay the same amount each month to pay off the purchase within the plan period. When the remaining plan period is less than 2 years for these purchases, we still include the full instalment amount, so it will pay off other balances faster if you continue to pay this amount.
A $6000 - 60 months Equal Monthly Payment purchase has a $100 instalment each month (which is included in your Minimum Monthly Payment). If you have 6 months interest free left, we still include the $100 in the 2-year estimate. Over 2 years this would be $2400 of payments, so if your other balances are smaller than $2400, it will be paid off earlier.
The forecast changes each month though so keep checking your statement.
Some of my balance is subject to long term interest free (longer than 2 years) - why do I need to see a warning and pay it off within 2 years?
Fair point. Latitude and other credit card companies are required to show the Minimum Repayment Warning including how much you need to pay each month to pay your account off in 2 years. If you have long term interest free purchases, please consult your interest free summary page alongside your Managing your repayments section, to make the best use of your interest free periods.
Why does the Managing your repayments table change so much?
Each month, the Managing your repayments table is recalculated based on your balance at the end of your statement period. If you have used your account for extra purchases, made additional payments or had other charges, then the forecast will take this into account.