NAB reforms credit card interest
(28th September 2010 – Australia) NAB announced today it would be the first major bank to reform the way both payments and balance transfers are managed on credit card accounts.
The changes are consistent with those called for by consumer advocacy groups and the credit card reforms proposed by the Federal Government during the recent election campaign.
The changes will apply across all NAB consumer and commercial credit cards, and means that transactions attracting the highest interest rate will be paid off before transactions attracting the lower interest rate.
If the rest of the industry made the same credit card changes, it is estimated that Australians would save around A$225 million a year in fees and interest.
Announcing the changes, NAB Personal Banking group executive, Lisa Gray, said that consumers may be unaware that typically across the finance industry their credit card repayments are used to pay off balances attracting the lowest interest rate first, leaving the higher interest balance to attract interest charges.
This will no longer be the case for NAB customers. Credit card transactions attracting the highest interest rate will be paid off before the lower interest rate – helping to reduce the overall interest cost to our customers, Ms Gray said.
The changes will apply across all NAB consumer and commercial credit cards, and means that transactions attracting the highest interest rate will be paid off before transactions attracting the lower interest rate.
If the rest of the industry made the same credit card changes, it is estimated that Australians would save around A$225 million a year in fees and interest.
Announcing the changes, NAB Personal Banking group executive, Lisa Gray, said that consumers may be unaware that typically across the finance industry their credit card repayments are used to pay off balances attracting the lowest interest rate first, leaving the higher interest balance to attract interest charges.
This will no longer be the case for NAB customers. Credit card transactions attracting the highest interest rate will be paid off before the lower interest rate – helping to reduce the overall interest cost to our customers, Ms Gray said.
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