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Interest-free credit cards hit Australia
One of the big four banks will now offer the first-ever no-interest credit card targeted at younger Australians who are ditching credit for buy now, pay later services.
Interest-free credit cards hit Australia
One of the big four banks will now offer the first-ever no-interest credit card targeted at younger Australians who are ditching credit for buy now, pay later services.
National Australia Bank (NAB) will offer the nation’s first-ever no-interest credit card, with the major lender hoping to gain traction among younger customers who have stopped using the bank's product.
NAB’s new StraightUp card features no interest, no late payment fees, no currency conversion fees and lower than usual credit limits.
It includes a monthly fee of between $10 and $20, depending on your chosen credit limit. However, the fee is refundable if you don’t use the card and have a $0 balance.
NAB group executive, personal banking, Rachel Slade said the NAB StraightUp Card represented a completely new approach to credit.
“We started with a straightforward idea – to create a card with no interest, no annual fees and no late payment fees,” Ms Slade said.
“This is the result – a simple, easy to understand credit card that can be used anywhere Visa is accepted online or in store.”
She said unlike other sectors of the payments industry, credit cards had not been able to keep up with changing customer needs.
“Credit cards have not really evolved in recent years,” she said. “But our customers’ needs and expectations are changing, and we want to change with them.”
However, the bank refused to say it was like buy now, pay later services as the card could be used anywhere.
Research director Sally Tindall said the card was likely to appeal to someone looking for credit but wary about falling into a debt spiral.
“With a maximum credit limit of $3,000 and a minimum repayment schedule that forces customers to pay down their debt faster, this new credit card is a step in the right direction,” she said.
“The StraightUp card comes pre-wrapped in cotton wool. Customers will still get hit with fees if they don’t clear their debt, but the damage that can be done is limited.
“The low credit limit won’t appeal to seasoned credit card users, but it’s likely to attract younger Australians looking to try out a credit card for the first time,” Ms Tindall concluded.
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