Interest free credit cards.
Are they as good as they seem?
You might have seen that the Commonwealth Bank and NAB have released an interest free credit card. Usually when one or more of the big 4 initiates a new product, they all follow suit. So, I think we can safely expect something similar from ANZ and Westpac in the foreseeable future.
The big 4 are moving into this niche to gain back some of the market share they have lost to short term lenders like Afterpay and ZIP Pay. Both boast short term loans that are interest free and as they are already linked to many online stores, they have become easily accessible.
However, don’t be fooled into thinking the big banks’ so-called “interest-free” credit cards are free! The fees on the banks’ “interest-free” credit cards can be more expensive in many scenarios than paying full interest on a traditional credit card. If you have any outstanding balance at the end of the month, both banks charge a small monthly fee of between $10-$22. Zip Money offers a similar card with small credit limits.
So, it comes down to how you use your credit cards, AfterPay and ZIP pay. If you are disciplined and can afford to pay back ALL credit in full each month, go for it…with caution! In fact, using credit cards in this way can even help you pay off your home loan sooner!
If you don’t pay back your credit cards in full each month, then read on….
Is your credit card hindering your ability to get a home loan? Read this!
We have one home loan offer at the moment, with an interest free credit card solution AND a $5,000 limit interest-free Visa Debit Card AND a home loan that offers a low-interest-rate home loan of 2.73% AND unlimited free redraws
If you would like to find out more, or would simply like to know more about how using a credit card can help you pay down your loan sooner, please give us a call on 02 8004 2222 or book in for a chat.
PS This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.