Thursday, 23 June 2011
Competitor banks are costing Australian credit card customers hundreds of millions of dollars by refusing to abolish overlimit fees for existing customers, instead waiting to be forced into lesser action by Government legislation, NAB Group Executive Personal Banking Lisa Gray said today.
Ms Gray said competitors should follow NAB’s lead by abolishing overlimit fees, slashing late payment fees and reforming payment hierarchies on credit cards – not just for new customers, but also for existing customers.
Key actions NAB has undertaken to give customers a better deal on credit cards include:
- Abolishing the $25 credit card overlimit fee;
- Cutting credit card late payment fees from $30 to $5; and
- Reforming the credit card payment hierarchy, to pay off higher interest items first.
Credit card legislation agreed to in the Federal House of Representatives yesterday (Wednesday, 22 June, 2011) addresses provision of information, credit limit increases and abolishing overlimit fees but only for new customers, not existing customers. The legislation takes effect from July 2012.
"The other banks should not be waiting for new laws to reform their credit card practices, NAB Personal Banking customers have already saved approximately $60 million as a result of our reforms to our credit cards last year," Ms Gray said.
"If the other banks followed NAB’s lead on credit cards, NAB estimates that Australian consumers could save up to $225 million per annum."
NAB estimates show that if the other lenders followed NAB’s lead, Australian credit card customers could save:
- Up to $68 million by reforming payment hierarchies;
- Up to $80 million by abolishing credit card overlimit fees for existing as well as new customers; and
- Up to $70 million by cutting late payment fees to $5.
"No bank has been working harder than NAB to improve its relationship with customers. Now is the time for the other banks to either act, or explain to their customers why they refuse to give them the best possible deal."
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