i feel like this has to be a joke.
theyre selling a credit card with monthly fee.
$12 for a $1,000 limit
$18 for a $2,000 limit
$22 for a $3,000 limit
this is equivelent to 14.4% interest on the lowest limit assuming you max it at $1000 and never pay it off..
this is such a joke..
https://www.commbank.com.au/credit-cards/commbank-neo.html?e…
Yes, but at the maximum limit it is only 8.8% pa - a lot lower than a personal loan
so, better to use BNPL ?
The primary difference, as I understand it, is that so long as you pay the monthly fees noted above, you have no obligation for any further payments. You can effectively buy $3k worth of goods, pay $22 a month and then pay it off at your leisure. I also understand the $3k limit is more generous than many other operators.
The BNPL operators use different methods that either require full payment within a limited and fixed timeframe (such as Afterpay), or regular payments (larger than those above) with a monthly fee (such as Zippay).
Whether one is better than the other would depend on your circumstances.
Short term cashflow issue? The Afterpay model looks good.
Pay off a purchase over a relatively short period (maybe six months)? The Zippay model looks good.
Want to effectively get a small personal loan with no fixed repayment period? The CBA model here looks good.
https://www.ozbargain.com.au/node/564684
Clearly the banks are trying some new shit to sucker young people who we never taught finances in high school.
It is all about perceived value, same reason why Afterpay became huge. I think this is extremely smart by the banks, I'm definitely not their customer or target audience, but if someone see's value in this product it would be a win win
bank borrowed money from gov for a record low interest (due to covid) therefore they can create something like this.
i dont like it.
i prefer people not to spend money they dont have. of course not for emergency purposes.
but look at those young people with iPhones. they go into expensive contracts plans or fall into credit card debt….
basically, interest = monthly fee
Banks and BNPL companies teaching young people to spend money that they don't have - no disrespect to young people.
Get a debit card and live within your means (if possible).
Banks want in on some of that Afterpay action. Issuing actual credit cards is a lot cooler than forcing customers to find a store that accepts Afterpay. Zip pay has half the effective interest rate assuming you max it out and don't pay it off, so banks could make a lot of money here. They should have done it years ago, offered mini credit cards with a high monthly fee.
Banks version of Pay Day Loan?
Banks exist to make money. Nothing is ever going to be free - someone, somewhere will end up paying for it.
Imo, These new CC to compete with Bnpl, is like pre-paying interest, even if you pay off monthly/by due date. Might as well get a normal CC, either free ones or higher tier ones for rewards.
If you have a normal CC and you're paying interest on it, you should reconsider your finances and budgeting.
Covered in depth on Whirlpool here for those wanting to know why & what the issue is with these cards: Commbank baiting young people in with a 0% card
NAB also launched one on the same weekend as CBA.
I really don't see why the banks didn't replicate a BNPL product. Strategically I would've thought that the goal of the big banks would be to get BNPL regulated.
Follow the BNPL product and let regulators swoop in and get it officially deemed as credit and regulated under the NCCP Act.
Instead, there's this product which doesn't look ideal although I'm sure they know what they're doing
I guess this is targeted at people who carry a balance? I've never not paid a CC off in full so the interest rate is totally irrelevant to me, but I guess if you have a big(ish) purchase coming up you could potentially save money here vs a regular CC with a ~20% interest rate.
You've just come to realise banks are a joke??