Payments, interest, fees, and your Mastercard® balance

March 7, 2019 ATB Financial

How payments are applied to your Mastercard

When I make a payment, does it go toward purchases or interest first? Can’t I just make the minimum payment? What happens if I buy an item that costs more than my credit limit allows? I just made a payment—why didn’t my current balance go down? We’re here to help you unravel these great Mastercard mysteries and more.


How payments are applied to your credit card.

When you make a payment to your Mastercard, does it automatically go toward paying off your balance? Not necessarily. Here’s how payments are applied to your card:

  1. Interest charges
  2. Creditor insurance, if you have it
  3. Fees, including annual or monthly fees, overlimit fees, cash advance fees, etc.
  4. Balance transfers
  5. Cash advances, including cheques
  6. Purchases
  7. Disputed items

As you can see, your payment is only applied toward purchases once your interest charges and fees are all paid off. This is why we recommend paying off your Mastercard® balance in full, each month, whenever you can.


Why you should pay more than the minimum.

Each month, your Mastercard only requires you to make a minimum payment which, for ATB Gold Mastercard®, is $10 plus all outstanding interest and fees. This is the lowest amount you can pay while remaining in good standing with Mastercard.

But the less you pay now, the more you pay later. Making only the minimum payment can be tempting, especially if you’re on a budget. But it can lead to big interest charges (and debt) over time. Learn more on how interest is calculated here.


There is such a thing as spending too much.

Every Mastercard cardholder has a credit limit, which is the maximum amount you can spend on a single card. It’s in place to protect you from spending more than you can pay back. If you attempt to spend over your credit limit, one of two things can happen: 1) your card will be declined or 2) you’ll trigger an overlimit fee. For ATB Gold Mastercard, this fee is $25.

Here’s how to avoid fees:
  • Know your credit limit and monitor it regularly.
  • Keep your balance low.
  • If you’re not sure if you’ve reached your credit limit, check your balance.

How to check your balance.

When you view your online credit card statement, finding your balance is pretty straightforward. Just remember that payments take a couple days to show up on your balance.

More questions? You can find detailed information on how payments, interest and fees are applied to your Mastercard® balance in the Cardholder Agreement as part of your welcome package.


® Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Used under license.


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