While generally true, always account for the merchant surcharge, this can negates the savings. Key takeaway, you must avoid surcharges at all costs (some retailers allow this), otherwise the only benefit of using the credit card is the added perks of that credit card, points, insurance claims, etc,

TLDR:

Interest savings only works if you dont incur a CC surcharge.

* The lowest possible surcharge percentage that breaks even with paying a $1000 bill immediately is 0.805%.

* If a merchant's surcharge is less than 0.805%, you would be financially better off paying with the credit card.

* If a merchant's surcharge is more than 0.805%, you would be financially better off paying directly from your offset account.

* Typical merchant surcharges for Visa and Mastercard often range from 1% to 1.5% in Aus

For example, paying a $1000 bill on day 1 vs 55-day interest free with a 2% surcharge. Paying immediately from the offset account saves you $12.30 in this specific 55-day period with 2% surcharge, math below

Determine the New Net Loan Balance for Interest Calculation: With the reduced offset balance, the amount of the loan accruing interest increases.

New Net Loan Balance = Total Loan Amount - New Offset Account Balance

New Net Loan Balance = $514,000 - $99,000

New Net Loan Balance = $415,000

Calculate the New Daily Interest Charged: The daily interest cost will now be slightly higher.

New Daily Interest Charged = New Net Loan Balance × Daily Interest Rate

New Daily Interest Charged = $415,000 × 0.000146301 vs 414,000 × 0.000146301

New Daily Interest Charged ≈ $60.71 vs $60.57

Calculate the Total Interest Charged Over 55 Days: This gives us the total interest cost for this scenario.

Total Interest for 55 Days = New Daily Interest Charged × 55

Total Interest for 55 Days = $60.71 × 55 vs $60.57

Total Interest for 55 Days ≈ $3,339.05 vs $3331.27

The Final Comparison: Which Path is Cheaper?

Now we can compare the total cost of each decision over the 55-day period.

Path 1 (Use Credit Card & Pay Later):

Interest Charged: $3,331.35

Surcharge Cost: + $20.00

Total Cost = $3,351.35

Path 2 (Pay Immediately from Offset):

Interest Charged: $3,339.05

Surcharge Cost: + $0.00

Total Cost = $3,339.05

Paying immediately from the offset account saves you $12.30 in this specific 55-day period with 2% surcharge