The time of no-interest credit cards has arrived! NAB was the first to offer this product, with their StraightUp zero-interest card. Then, Commonwealth Bank followed close behind, launching the Neo card in late 2020. Clearly, banks are responding to the popularity of buy-now-pay-later services such as Afterpay and Zip by coming up with their own, alternative products.
Unlike buy-now-pay-later services that divide repayments over a maximum of 4 months, though, the StraightUp and Neo cards only require a minimum monthly payment. However, be aware that the no-interest cards do charge a monthly fee. This cost only comes into play when the card is in use for the month. Otherwise, when there’s a zero balance for an entire month, the fee is waived.
Differences between the StraightUp and Neo cards
The StraightUp and Neo cards have slight differences in their monthly fees. There’s also a more significant difference in their minimum monthly repayments. See below for further information.
The cards have similar features, too. Both have the same three credit-limit options available, namely $1,000, $2,000, or $3,000 limits. Plus, each of the cards come with extra benefits, including zero foreign-currency fees, no late-payment fees, and no annual fees.
Here are the details for each card limit:
$1,000 Spending Limit
|Detail||NAB StraightUp - $1,000||Commbank Neo - $1,000|
|Minimum Monthly Payment||$35||$25|
As you can see, NAB's card has a slightly lower annual fee of $10, compared to CommBank's $12 annual fee when the card is in use. However, if you want a reduced minimum payment every month, the Neo is the top choice – you’ll cutback $10, paying $25 compared with NAB’s $35 minimum.
$2,000 Spending Limit
|Detail||NAB StraightUp - $2,000||Commbank Neo - $2,000|
|Minimum Monthly Payment||$75||$25 or 2% ($40 max)|
Some bigger differences emerge when you hit the $2,000 minimum spending limit. Again, the Neo has a slightly higher monthly fee of $18 than NAB's $15. The minimum monthly payment varies much more, though. CommBank’s Neo's minimum ranges between $25 and 2% ($40 max), while NAB’s StraightUp is quite a bit higher, at $75 per month.
$3,000 Spending Limit
|Detail||NAB StraightUp - $3,000||Commbank Neo - $3,000|
|Minimum Monthly Payment||$110||$25 or 2% ($60 max)|
The same pattern follows for the $3,000 spending limit as it does for the $2,000. The CommBank card charges a $2 higher monthly fee than NAB’s product, adding up to a $24 difference annually if using the card consistently for 12 months. On the other hand, when it comes to minimum monthly payments, Neo’s $25-$60 minimum monthly repayment is significantly lower than StraightUp’s $110 minimum.
Neither bank has specified the need for customers to earn a minimum income to apply for their cards. Since the three credit limit options are all relatively low, this makes it likely that the application requirements will be more relaxed than for other credit cards.
On the NAB product listing online, the information states that applicants need a regular income, yet there’s no specific number mentioned. Currently, there aren’t any income requirements listed for CommBank’s card, but they do mention applicants must legally have the right to work in Australia and not be currently bankrupt.
Keep an eye on both banks’ websites for updates, though, in case the application information changes.
Which no interest credit card is better for me?
As always, the decision about which card is the right one for you comes down to your preference and circumstances. If you want to pay a slightly lower monthly fee and you're capable of handling a higher monthly repayment, the NAB StraightUp card could be the better choice.
But, if you’re unsure about how much you'll be able to repay each month or if you can’t meet the higher minimum repayments, the CommBank NEO could be your preferred option.
Some people wonder why they wouldn’t just be better off choosing the StraightUp card for the lower monthly fees and not worrying about making late repayments if they can’t meet the minimum because no interest gets charged anyway. Understand that this scenario isn’t as straightforward as you may think. If your repayments get behind, NAB will likely place a hold on your card, so you can’t use it to make new purchases until you’ve caught up on repayments.
As a result, it’s best to make your credit card decision based on how much you think you can afford to repay each month.
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