CommBank to help credit card customers avoid late payment fees
Commonwealth Bank vows to help credit card customers avoid late payment fees in the second half of the financial year.
The Commonwealth Bank released its half-year results this week, revealing that it has lifted its first-half cash profit two percent to $4.9 billion. As well as revealing its profit and plans to lift mortgage rates, CBA’s CEO Ian Narev also confirmed that the bank would focus on helping customers avoid late payment fees in the second half of the financial year.
Cardholders are usually only required to pay between 2% to 3% of their balance each month to avoid late payment fees. Unfortunately, failing to paying credit card bills on time is still a common problem for a third of Australians. According to a survey conducted by finder in November 2016, 32.4% of Aussies have defaulted on their credit card payments. The results revealed that 17.5% cardholders had missed one credit card repayment, while a further 14.9% had failed to pay their credit card bill more than once. Not only does this mean Australians are regularly being slammed with late payment fees, but they’re also making dents in their credit history. Frequent late payments send bad signals to lenders and can reduce your chances of approval when applying for another credit card or loan in the future.
Ian Narev, CBA’s chief executive officer says there are two major reasons why customers don’t pay their credit card bills on time. The first of these is that they simply forget. To combat this, CBA hinted at adding repayment reminder notifications to its NetBank app to prompt customers to pay their bills in the coming months. There’s also the existing autopay feature, which allows you to schedule payments beforehand to ensure you never forget to pay your bill.
According to Narev, the second major reason that customers don’t pay their credit card bill is because they’re in financial hardship. Commonwealth Bank aims to nurture a culture that gives customers the confidence to get in touch with the bank if they’re struggling to pay their credit card bill. This way, CBA can provide the necessary assistance and offer alternative payment options to help customers avoid defaulting on their payment.
To prevent overspending, Commonwealth Bank has also given customers the option to put limits on their spending. So if you’re going for a night out, doing the groceries or going on holidays, you can set daily limits via NetBank to keep your spending in check.
Given that the Commonwealth Bank (as well as ANZ) has the highest late payment fee of $20 out of the Big Four, customers would benefit from taking advantage of some of these tools. This news also comes just weeks after St.George increased its late payment fees from $9 to $15. See our guide on how to pay your credit card bill each month for tips to keep your finances in control.