Community First joins Westpac, NAB and CommBank as the only credit union to offer âzero interestâ credit cards.
Zero interest credit cards are generally designed to compete with BNPL products, offering “extremely competitive” monthly fees, no late fees, and cash advances.
Community First is the first credit union to launch its own interest-free credit card – “n0w” – with monthly fees “much lower” than those charged by banks.
It comes just days after Westpac launched its own zero interest credit card, after NAB and CommBank launched theirs last year.
Community First’s product also does not have late payment fees or cash advances.
The monthly fees are billed according to the credit card limit chosen by the user, divided into three levels:
- $ 1,000 credit card limit: $ 9 monthly fee
- $ 2,000 credit card limit: $ 14 monthly fee
- $ 3,000 credit card limit: $ 19 monthly fee
For the $ 1,000 limit, this is $ 1 less than the monthly charges for Westpac and NAB, and $ 3 less than for CommBank.
Its $ 2,000 monthly limit fee is $ 1 lower than NAB and $ 4 lower than CommBank, while its $ 3,000 monthly limit fee is $ 3 and $ 1, respectively.
John Tancevski, CEO of Community First Credit Union, said the “n0w” card will compete with traditional credit cards, but will target consumers looking for simplicity, no interest and no late fees.
“n0w is also the only interest-free card on the market that allows cash advances, and it will appeal to people who don’t like traditional credit cards, as card users don’t need to track the days without interest or worry about late fees, âMr. Tancevski said.
Alternative to BNPL for âfinancially savvyâ Millennials
Mr Tancevski said the product is an alternative to the Buy Now, Pay Later (BNPL) products popular among Millennials.
âYoung Australians are increasingly avoiding traditional credit cards in favor of alternative payment methods such as BNPL,â Tancevski said.
“However, with BNPL products, buyers generally have to repay their debts in relatively quick installments and will be charged fees if they are in arrears.”
According to data released in May 2021 by payday advance provider âBeforepayâ, 53% of BNPL users are millennia or younger.
In contrast, 6.9% of its users under 35 have a credit card.
âAdditionally, relying on BNPL solutions may also restrict where you shop or require you to sign up for multiple BNPL services for a greater choice of purchases,â said Tancevski.
“We are putting the purchasing power back into the hands of the consumer, because cardholders can now buy guilt-free knowing that there is no interest to pay and that they can buy anywhere Visa is accepted, no matter what. the whole world.”
Image by Clay Banks on Unsplash