FinTech: NAB Launches An Interest-Free Credit Card To Counter BNPL Fad
NAB’s “StraightUp” is Australia’s first interest-free credit card.
National Australia Bank (ASX: NAB) has launched, StraightUp, the country’s first interest-free credit card as “Buy Now Pay Later,” or BNPL, schemes become increasingly popular with shoppers. (Small Caps)
The credit card charges no interest, late payment fees, or foreign currency fees. All it levies is a simple monthly fee, according to a “credit limit.”
However, the bank will reverse the monthly fee if the customer makes no purchases and has an outstanding balance of $0 during the whole statement period.
The bank clarifies that it will charge no fees on international purchases made either online or overseas.
The application process is extremely simple. The bank will respond in 60 seconds, and if the card is approved it will arrive within five days. The customer has been to activate the card and get the NAB app.
Customers have three credit limit options as follows:
- $ 1000 – a monthly fee of $ 10
- $ 2000 – a monthly fee of $ 15
- $ 3000 – a monthly fee of $ 20
Consumers can use the NAB StraightUpCard at anyplace which accepts Visa. Additionally, the card can be used with contactless options such as Apple Pay, Google Pay, Samsung Pay, and NAB Pay.
However, consumers cannot use the card for cash withdrawals or for gambling transactions. They also cannot effect balance transfers.
Consumers want more financial control
According to financial comparison website RateCity, consumers pay an average interest rate on credit cards of 16.78% in Australia. Average annual fees and late payment fees could go as high as $ 115 and $ 20 respectively.
The NAB StraightUp card could therefore prove to be popular with consumers, and a viable alternative to BNPL offers.
Notably, according to theWorldPay Group’s Global Payments Report for 2020, credit card transactions will decline during the next three years, while BNPL will show a rising trend.
NAB Group Executive of Personal Banking, Rachel Slade, said: “In the NAB StraightUp Card, we’ve created something completely different to every other credit card available today, with a simpler approach that makes it easy for customers to take control of their finances.”
Customers have become very circumspect with their finances given the uncertain economic outlook from the virus pandemic. This is also one reason for the popularity of BNPL schemes.
According to NAB forecasts, unemployment could reach as much as 10% in the March quarter next year and stay at 8% until the end of 2021.
Speaking at a parliamentary hearing on Friday, National Australia Bank’s chief executive Ross McEwan warned that business confidence could be crushed and the economic implications from the virus would be much worse if the country did not open its state borders.
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