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Handsomedan

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#275810 10-Sep-2020 15:45
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NAB has released a new credit card offering no interest ever...

 

https://www.nab.com.au/personal/credit-cards/nab-straightup-card

 

What is the NAB StraightUp Card? 

 

It’s a credit card with a set amount of funds (called a 'credit limit’) which you can borrow from at any time. How much credit is available to you will vary depending on how much of your credit limit you have used by making purchases (this is also known as your ‘available balance’).

 

Unlike most credit cards, the NAB StraightUp Card comes with no interest or other charges – just a simple monthly fee and minimum monthly payment based on your credit limit

 

 

 


An interesting idea. Looks like there's a fee payable in any month that the card is used, but if there's not use there's no pay. 





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l43a2
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  #2561807 10-Sep-2020 16:11
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i like that idea. tbh






Handsomedan

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  #2561819 10-Sep-2020 16:29
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Some of the features are quite thoughtful too: cutout at the bottom and four dots on the top for tactile purposes for the eyesight impaired. 

 

I must admit, a card that charges fees but no interest is the best kind...especially as there's a credit limit attached, which can only be accessed if the card is paid down - doesn't look like massive increases in card limits are on the table, so clearly aimed at the youth and less credit-savvy market. 

 

 





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davidcole
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  #2561821 10-Sep-2020 16:31
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I wonder then why it's still a credit card though....and not a debit card.  Credit card implies you can rack up debt owning to the bank.  





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chevrolux
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  #2561822 10-Sep-2020 16:36
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Yea is this not just a debit card with an overdraft facility?

davidcole
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  #2561824 10-Sep-2020 16:40
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chevrolux: Yea is this not just a debit card with an overdraft facility?

 

Exactly.





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Handsomedan

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  #2561826 10-Sep-2020 16:42
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No - the bank provides a credit facility linked to the card...regardless of the interest rate, it's a credit card. 

 

That's my take anyway. 

 

 





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davidcole
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  #2561829 10-Sep-2020 16:47
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Handsomedan:

 

No - the bank provides a credit facility linked to the card...regardless of the interest rate, it's a credit card. 

 

That's my take anyway. 

 

 

 

 

But what's the difference between a 0% credit card and a debit card with overdraft?

 

 





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chewster
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  #2561839 10-Sep-2020 17:09
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davidcole:

 

But what's the difference between a 0% credit card and a debit card with overdraft?

 

 

Usually nothing. But some payment gateways do treat them differently. Eg try to use a debit card for an auth hold on a rental car or hotel.





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cokemaster
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  #2561865 10-Sep-2020 18:38
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Depending on how you use this card, it could very well be more expensive than a traditional interest bearing card.

 

If you take the $3000 credit limit from NAB, you'll pay $20 per month in fees which works out to be $240 per year. $240/3000 works out to be an effective interest rate of 8%pa.
It gets worse if you use less - eg. a $1500 balance makes it around 16%pa and a $500 average balance would make it 48%pa . 

 

For instance - if you use a 'ASB Visa Light' card, there are $0 monthly fees, upto 55 interest free days (assuming you clear your balance off each month), purchases over $1000 are interest free for 6 months and they've dropped the interest rate to 9.90%pa if you do carry a balance. 





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KiwiSurfer
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  #2561870 10-Sep-2020 18:49
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Agreed, doesn't seem like a good deal for those who pay off balances monthly. Much better off to either get a zero-fee card (e.g. Kiwibank Zero, ASB Light, Amex Airpoints, etc) or work out which rewards card give you rewards valued more than the annual fee.

 

I presume the target audience for this are people who would just maintain a balance over a long period of time. Possibly they won't actually lend that much money on these cards too capping limits lower than they might for their other cards. They might market these cards to youth ("Here's interest free cards with $1,000 limit!") and then later upsell them to other cards by using higher credit limits as a carrot ("Here's interest bearing cards with $5,000+ limit!").

 

Also if it's a credit card it will attract a higher interchange fee so the banks will be able to clip more money off transactions. I can see why banks would prefer to issue this type of card as a credit card as they'd make more money that way.


wellygary
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  #2562350 11-Sep-2020 14:54
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Credit Limits of $1000, $2000 and $3000 ..... hmmm

 

This is aimed squarely at fending off the interest free instalment providers like after/whatever pay

 

It designed to try to get young customers back to using credits cards who are afraid of getting stung with high interest rates on any outstanding balances....

 

 

 

 


sbiddle
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  #2562449 11-Sep-2020 16:49
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wellygary:

 

Credit Limits of $1000, $2000 and $3000 ..... hmmm

 

This is aimed squarely at fending off the interest free instalment providers like after/whatever pay

 

It designed to try to get young customers back to using credits cards who are afraid of getting stung with high interest rates on any outstanding balances....

 

 

It's solely designed for the same market of young people who jump at solutions such as After Pay. Very little use to the majority of people out there.

 

 


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