SYDNEY, Australia – The Commonwealth Bank announced the launch of its newest interest-free credit card to cater to the growing bank-now-pay-later market. This announcement came a few hours before one of its largest competitors, National Australia Bank, launched NAB Straight Up credit card that charges zero percent interests.
Previous reports show that there has been a rapid decline in credit cards among Australians, especially for younger audiences. This decrease in credit card users resulted from the rapid growth of buy-now-pay-later platforms. As a take on the issue, major banks, including Commonwealth Bank, have launched interest-free credit cards to nab credit card users back.
The Commonwealth Bank’s newest credit card, which they named the Commbank Neo, is set to start servicing “in late 2020.” However, CBA already started communicating with customers and interested users. The bank is now distributing contact forms to make communication easier between the bank’s customer service team and its clients once the card has been rolled out.
The Commonwealth Bank is thrilled to announce the key features and highlights of the CommBank Neo card. The card’s goal is to eliminate all unnecessary fees and interests, with minimum monthly fees being enough to cover everything up. The Commbank Neo removes all fees, including fees or interests for late payments, foreign exchanges, and even cardholder fees.
These fees will now be covered by minimum monthly payments that will depend on your credit limits. The Commbank Neo card sets only three limits: 1,000 dollars, 2,000 dollars, and 3,000 dollars. Any credits that will exceed your card’s set limits are not allowed. According to CBA, all transactions exceeding the limit “will be declined.” The monthly fees you will have to pay to cover for all eliminated fees only ranges from 12 to 22 dollars. 12 dollars will be charged for customers with a 1,000 dollars limit, 18 dollars for a 2,000 dollars limit, and 22 dollars monthly fee for the maximum limit of 3,000 dollars.
However, customers should also not worry about paying monthly charges for their inactive months. The Commbank Neo credit card also waves off monthly fees for months where the cards have zero balances. These fees are also not applicable for months when the credit cards are not in use.
The Commbank Neo card will also not allow transactions for gambling purposes. There will also be no cash advances, although some exceptions may apply for urgent application requests. Users of CBA’s newest no interest credit card will also have exclusive access to more Commbank Rewards through the bank’s loyalty program. These rewards include cashback bonuses from almost a hundred retailers to qualified users and customers.
As a part of the credit card’s terms and conditions, CBA requires 25 dollars or 2 percent of your closing balance, or whichever is greater, as a minimum repayment.
In general, Commbank Neo prides in the following features:
- Three credit limits: 1,000 dollars, 2,000 dollars, and 3,000 dollars
- A minimum collated monthly fee of 12, 18, or 22 dollars, depending on the card limit
- Zero unnecessary fees or interest: late fees, foreign exchange fees, and cardholder fees
- No monthly fees on months with zero credit card balances or no card use
- Not for gambling use and no cash advances (exceptions may apply)
- Access to Commbank Rewards under CBA’s loyalty program
CBA is also transparent about some of the compromised features of the new credit card. Users of the Commbank Neo credit card are not eligible for earning the bank’s Award Points. Users of the card are also not qualified for SurePay plans or Wealth Package benefits. The card also does not allow balance or credit transfers and credit limits are significantly lower than the regular credit cards that many other banks offer. Aside from these, the Commbank Neo credit card also does not cover or include international travel insurance, which might turn off millennial travellers.
CBA’s new credit card offer is seen to be one of the rippling effects of the move of Australia’s fourth-largest bank, National Australian Bank, to take back the growing buy-now-pay-later market. Australia’s first interest-free credit card, NAB Straight Up credit card, is also a similar model to CBA’s newly-announced card. Straight Up credit card features include the following:
- No interest rates (compared with the 20 percent interests most credit card lines charge)
- Zero annual or late payment fees or charges
- Waved off fees during months when credit cards are not in use
- Up to 3,000 monthly credit limits
- Required minimum monthly payment depending on the card’s limit, plus a monthly fee. Monthly repayments range from 35 to 110 dollars per month, and monthly fees are from 10 to 20 dollars monthly, both depending on credit limits and balances.
- NAB Straight Up credit card is also usable in any store or retail outlets where Visa cards are accepted
This move from Australia’s major banks came shortly after Reserve Bank’s recent report on the 10 percent decline of issued credit cards over the past 12 months and 14 percent decline on overall credit card value transactions. Data from RBA’s recent analyses show a drop of 2 million credit cards in the country within just a year, and a total of 5.3 million cancelled credit cards from Australian customers recorded in the mid of 2017.
As the product is new to the Australian audiences, there are still studies and analyses on comparisons of the value of new zero interest credit cards that charge minimum monthly fees over regular credit cards.