NAB has hiked interest rates across select credit cards today, as more Aussies turn to plastic to help make ends meet.
The major bank increased the interest rate on its Low Rate, Rewards and Qantas cards by 1 percentage point, effective today.
The change means Low Rate card customers will be paying a new purchase rate of 13.49 per cent, while Rewards and Qantas card customers will be paying 20.99 per cent.
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NAB joins CBA in changing up its credit card pricing. Last Wednesday, the country’s biggest bank hiked the monthly account fees on its no-interest credit card, Neo.
The move means customers will be paying up to $5 more per month, depending on their credit card limit. These fees are only charged if customers have a debt owing or use their card within the month.
RateCity research director Sally Tindall said, while the rate rises were “minor in the scheme of things” they were a good reminder to check whether your credit card was right for you.
“While credit card interest rates do not move in line with RBA [Reserve Bank] decisions, banks can hike the rates on these cards at any time they choose,” Tindall said.
“In the past six months, three of the Big Four banks have increased rates on select cards. As a result, the highest purchase rate from a Big Four bank is now 20.99 per cent.
“Even within a bank, rates and fees can vary wildly. All four big banks have low-rate, low-fee options, but anyone on the hunt for rewards points has to be prepared to pay some pretty hefty fees and, if they can’t clear their debt each month, eye-watering interest rates.”
Where interest is charged, the average credit card purchase rate is currently 18.14 per cent, according to RateCity. The lowest rate is currently 7.49 per cent – from G&C Mutual.
Millions of Aussies relying on credit cards
Millions of Aussies are turning to credit cards to make ends meet as the cost-of-living crisis continues.
New research by Finder found 44 per cent of credit card holders had made unplanned purchases on their card in the past 12 months, while 7 per cent admitted to using their credit after running out of cash before payday, and 21 per cent said they got caught out by an emergency expense. A further 14 per cent admitted they spent more than they could afford during sales like Black Friday.
Finder credit card expert Amy Bradney-George urged Aussies to be “extra cautious” when using their credit card right now, particularly as many of us hold onto Christmas debt.
“If you have credit card debt you’re paying interest on, you could consider transferring it to a card that offers an introductory 0 per cent interest rate on balance transfers,” Bradney-George said.
“This gives you a period of time when you can repay what you’ve spent without the added cost of interest. Just make sure you have a plan for repayments to avoid higher interest charges at the end of the introductory period.”
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