Coronavirus is affecting us all in many different ways. If you have a credit card, you might have questions about how the current situation will affect your account and other features, such as insurance, rewards or introductory offers. If you're looking at getting a credit card to help manage expenses or consolidate existing balances at this time, there are some criteria you need to be aware of. We have put this guide together to help you find the information you need to help manage your credit card during this time.
As the economic climate shifts, this might be the right time to simplify your finances and consolidate some of your debts. If you're worried about keeping up with your current credit card repayments and interest charges, there are a few options you can look at to help manage the balance.
This includes hardship policies offered through your current bank or provider, which are outlined in further detail below. You could also consider a new balance transfer credit card or a loan that is designed to help in this situation. Keep in mind that there are eligibility criteria you will have to meet and documents (including payslips) you will need to provide upon application.
Balance transfer credit cards
A balance transfer card could give you an introductory 0% p.a. interest rate for anywhere from 6 to 26 months when you move your existing debt to a new card with a balance transfer offer. This is a great option for those who are accruing interest on current balances and are eligible for a new card. However, you should note that after the introductory period you will be charged interest on any remaining balance, usually at the higher cash advance rate.
There are a few other key details to remember before you apply for a balance transfer card, including the following:
Most balance transfer cards accept debts from Australian credit cards, charge cards and store cards issued by a different provider.
Some cards – including those issued by Citi, Coles, Virgin Money and Qantas Money – also accept debts from personal loans when they are issued by a different provider.
The amount of debt you can balance transfer depends on the credit limit you're approved for on the new card. This, in turn, is based on what you could reasonably afford to pay off over a three-year period (based on a range of personal and financial factors). So even if you're approved you may only be able to get a partial balance transfer. Learn more about balance transfer limits before you apply.
What if I don't qualify for a new credit card?
If a balance transfer credit card isn't right for you, or you are not eligible, there are other options. A debt consolidation personal loan typically allows you borrow from $1,000 to $100,000 without needing to use an asset, like a car or property, as security. You can use the loan for any worthwhile purpose and repay the loan plus interest over an agreed term (usually one to seven years).
What if I can't make my repayments?
The major banks have all released guidelines and support packages for people affected by the coronavirus pandemic (similar to the support offered during the recent bushfire crisis). Below, we have included a brief summary of what major banks are offering in relation to credit card accounts, with links to any relevant provider resources.
Credit card support during COVID-19 pandemic
ANZ is offering financial hardship support for all customers experiencing difficulties as a result of the coronavirus pandemic. To discuss your options, call the bank's dedicated financial assistance team on 1800 315 548.
If you have a business credit card, call the ANZ business cards team on 1800 032 481 or contact your relationship manager. Alternatively, you can visit an ANZ branch if you are not medically required to self-quarantine.
Bankwest has a dedicated coronavirus support page that it is updating with the latest information. It is offering financial hardship support to all customers, and is assessing each situation individually.
If you are having trouble meeting credit card repayments or have other financial concerns about your account, contact the dedicated team by emailing firstname.lastname@example.org or using one of the following phone numbers:
You can also visit a Bankwest branch, providing you are not medically required to self-quarantine.
While the BankSA COVID-19 assistance information focuses on home loan support for individuals, you can fill out a request for hardship online and nominate your BankSA credit card account as one that needs support.
If you have a small business, the support available could include fee waivers on merchant terminal fees for three months, which you can request by applying online.
Note that Citi has said phone waiting times are longer than usual. You can visit the dedicated COVID-19 page for further details of banking options and other financial assistance being offered by Citi.
If you cannot make your credit card repayments, you can call 133 464 and request a 3-6 month payment pause. This means that repayments are not required and your card will become inactive. Interest and fees still accrue and after the pause, the balance will be converted to an instalment plan.
You can apply for support by filling out an online form or by calling 1800 220 718. However, Latitude Financial Services has said it is experiencing a higher than usual number of calls, so it recommends applying online.
As of Friday 20 March 2020, all Macquarie personal and business customers can defer loan repayments for up to 6 months. This includes credit cards. You can make a request by filling out an online form.
You can also call Macquarie Bank on 1800 674 922 to discuss other relief measures for your credit card, or visit the bank's coronavirus information page for further details.
You can also check your account through the NAB app or Internet banking, or visit a NAB branch if you are healthy and able to do so.
Minimum monthly payments have been reduced to the greater of $5 or 0.5% of the closing balance. This will be automatically reflected on statements issued from 27 April.
Starting 3 April, NAB will not charge late fees on any personal or business credit card.
The NAB Low Rate Classic card's purchase interest rate has been reduced from 13.99% p.a. to 12.99% p.a. indefinitely. For existing cardholders this takes effect from the start of your next statement period beginning after 27 April. For new cards, this is effective from 27 April.
St.George offers hardship assistance packages for personal and business customers affected by the coronavirus pandemic, with options for reducing or deferring payments in the short term. You can talk about these options by calling one of the following numbers:
Personal: 13 33 30
Business: 13 38 00
You can also manage your account online, through phone banking or by visiting a branch if you are able to do so. St.George said there may be "isolated branch closures", so it's a good idea to call the branch directly before visiting.
Westpac has a dedicated page with details about support as the coronavirus situation evolves. It offers hardship assistance for all customers, including options for reducing or deferring payments.
You can apply for hardship assistance online by filling out a secure application form on the Westpac website. You will need to provide details of your financial circumstances and the credit card or other accounts that you have with Westpac. It should take about 10-30 minutes to complete. Once submitted, it will be reviewed and a team member will contact you. Westpac has said this may be faster than calling at the moment, due to the high volume of phone calls being made.
Alternatively, you can visit a branch if you are healthy, or call one of the following numbers:
Personal: 132 032
Business: 132 142
Note that Westpac has said there may be some branches that are closed during this time, so check the website or app, or call a branch directly before visiting.
Other repayment options
If you have a credit card from another provider, contact them directly to discuss your options. Be aware that many providers are experiencing a high volume of calls and enquiries, so it could take time. You may be able to visit a branch instead – but it is worth checking your provider's website for updates on whether branches are currently open.
The majority of coronavirus financial support packages focus on lending and repayment relief. However, if you need access to funds, you could contact your provider's financial hardship team to discuss your options.
You could also consider the following credit card options:
Requesting a credit limit increase. This will give you access to more funds through your existing credit card account. But be aware that increasing your credit limit can also increase potential interest costs and may lead to further debt. You can learn more and weigh up the pros and cons in this guide.
Withdrawing cash. While you could use your credit card to withdraw cash from an ATM (or supermarket checkout), this typically attracts cash advance fees and interest charges from the date of the transaction. As a result, the costs can quickly add up and leave you with even more debt.
There are a few different factors to consider in regards to travel plans and coronavirus, so we have broken them down by topic.
Credit card complimentary travel insurance cover
It is unlikely your trip will be covered by travel insurance, as most policies have general exclusions for both "known events" and "pandemics". However, if you've thoroughly read through your product disclosure statement and believe there are extenuating circumstances, you can contact your credit card's insurance provider to see if you can make a claim.
What if a travel company I booked with goes bankrupt or into voluntary administration?
With most insurance policies, this would come under any information about "insolvency". Similar to other travel insurance claims, most complimentary credit card insurance policies have exclusions for insolvency. However, it does vary depending on the circumstances, so check with your credit card's insurance policy provider. You could also call the business or the voluntary administrator that is overseeing the process.
Below, we have summarised the policy information for insurers that offer complimentary credit card travel insurance.
Remember: Always refer to your product disclosure statement (PDS) or credit card complimentary insurance booklet for the terms, conditions, limits and exclusions.
Credit card providers
ANZ, Bank of Melbourne, BankSA, Bendigo Bank, BOQ, Citi, Coles, HSBC, IMB, ING, NAB, St.George, Suncorp, Virgin Money, Westpac
American Express, Macquarie Bank, Qantas Money, Woolworths
It is unlikely you will receive cover through a complimentary credit card travel insurance policy provided by Allianz due to the definition of insolvency and policy exclusions. Below, we have included further details. You should also refer to your credit card insurance product disclosure statement (PDS) or contact Allianz with any specific questions.
Definition of insolvency
Insolvency or insolvent means bankruptcy, provisional liquidation, liquidation, appointment of a receiver, manager or administrator, entry into any official or unofficial scheme of arrangement, statutory protection, restructuring or composition with creditors, or the happening of anything of a similar nature under the laws of any jurisdiction.
Allianz credit card travel insurance policies typically exclude the claims that are:
Caused by insolvency or financial collapse of a services provider that you made a booking with
Insolvency or financial collapse of any company, organisation or person with whom they deal
The definition of insolvency and exclusions in complimentary credit card travel insurance policies provided by Chubb mean that it is unlikely you will get cover. Below are further details, with an example from the American Express credit card insurance product disclosure statement.
Definition of insolvency
Insolvency means bankruptcy, provisional liquidation, liquidation, insolvency, appointment of a receiver or administrator, entry into a scheme of arrangement, statutory protection stopping the payment of debts or the happening of anything of a similar nature under the laws of any jurisdiction.
There is a general exclusion for the refusal, failure or inability of any person, company or organisation, including but not limited to a travel agent, tour operator, accommodation provider, airline or other carrier, vehicle rental agency or any other travel or tourism services provider to provide services or accommodation due to their Insolvency or the insolvency of any person, company or organisation they deal with.
Zurich (Cover-More) offers very specific details around when you may or may not be able to get cover through a complimentary credit card travel insurance policy it has underwritten. Below are further details from a CommBank policy. However, you should check your credit card insurance policy documents or contact Zurich/Cover-More directly for specific questions.
Definition of insolvency
Insolvency or insolvent means bankruptcy, provisional liquidation, liquidation, insolvency, appointment of a receiver or administrator, entry into a scheme of arrangement, statutory protection, presentation of a petition for the compulsory winding up of, stopping the payment of debts or the happening of anything of a similar nature under the laws of any jurisdiction.
If, due to the insolvency of a travel services provider:
You have to rearrange your journey, we will pay the reasonable cost of doing so. (We will not pay more for the cost of rearranging your journey than the non-refundable costs, which would have been incurred had the journey been cancelled. The cover is limited to the same or similar standard of transport and accommodation as was originally booked.)
You have to cancel your journey (where you cannot rearrange it prior to leaving home) we will pay you:
The value of the unused portion of your prepaid travel or accommodation arrangements that are non-refundable and not recoverable in any other way
Your travel agent's cancellation fees, equal to the lesser of $500 or 15% of the value of the travel arranged by the travel agent. We will only pay these fees if, at the time the circumstances causing your claim happened, you had already paid at least the full deposit
The value of frequent flyer or similar flight reward points, air miles, redeemable vouchers or similar schemes lost by you following cancellation of the services paid for with those points if you cannot recover your loss in any other way. The amount we will pay is calculated as follows:
For frequent flyer or similar flight reward points, loyalty card points, air miles:
The cost of an equivalent booking, based on the same advance booking period as your original booking. We will deduct any payment you made towards the booking and multiply it by the total number of points or air miles lost, divided by the total number of points or air miles used to make the booking.
For vouchers, the face value of the voucher or current market value of an equivalent booking, whichever is the lesser.
You have to incur additional expenses in returning home, we will pay your reasonable additional accommodation (room rate only) and additional transport expenses, at the same fare class and accommodation standard as originally booked. You must recover the maximum amount available from any statutory fund, compensation scheme or any other source. For example, if you paid for your airline ticket with a credit card and the transaction meets the card issuer's terms and conditions regarding non-provision of services, you need to claim the cost of the airline ticket through the credit card issuer first.
Airlines, cruise companies, tour companies and accommodation providers are all updating their policies and offerings around travel changes and cancellations. This includes some fee-free options.
For example, Virgin Australia and Qantas both include options for changing or cancelling flights. And on 19 March 2020, Airbnb announced it would offer full refunds for reservations and Airbnb Experience bookings made on or before 14 March 2020 if the check-in date is between then and 14 April 2020.
If you do cancel your travel plans and have it refunded to your credit card, keep in mind that it could take a few days to show up on your account. Another important detail: the refund won't count towards your required repayments, even if the account balance is $0.
While most refunds should come directly from the business you have booked travel with, you may also have some other options through your credit card, such as requesting a chargeback. You can learn more about different credit card refund options or contact your provider to find out what's possible.
American Express coronavirus travel support details
Amex is offering the following options for cardmembers:
Complimentary travel credit: If your Amex card comes with a travel credit that expires between 1 February and 30 June 2020 and you have not yet redeemed it, the expiration date will automatically be extended to 31 December 2020.
Velocity Platinum card complimentary flights:Cardmembers who have a complimentary flight that expires between 1 February and 30 June 2020 will have the expiry automatically extended to 31 December 2020.
Travel bookings made through American Express Travel: If your booking is scheduled within the next 3 days, you should contact American Express Travel for assistance. The support team number is 1300 303 877 (Mon-Fri 7am-6pm AEST). If you have a Platinum Charge Card, you can call the number on the back of your card. If you have a Centurion Charge card, call your dedicated relationship manager.
Transaction disputes: If you have trouble getting a refund from a third-party travel service (for example, if they have gone into administration), you can submit a dispute through your online account. Just select the transaction and click on "Have a question about this charge", then follow the prompts.
This may be a time when you are considering different financial options, including a new credit card. If that's the case, make sure you carefully think about how you would manage the account and repayments to reduce the risk of ongoing credit card debt. You could start by plugging some numbers into this credit card repayment calculator or by learning more about credit limits.
Below, we have included some more details about different types of credit cards that people might be considering at the moment. Ensure that you meet all the eligibility criteria and carefully read the product disclosure statement before applying.
Low rate and 0% purchase rate offers
If you want to use a credit card for upcoming expenses, a card with a low ongoing interest rate can help keep the overall costs down when you carry a balance from new purchases. You can also compare cards that offer 0% p.a. interest on new purchases for an introductory period, with some offering up to 15 months interest-free.
But keep in mind that you will still have to make repayments each month. And if you do get a 0% p.a. purchase rate offer, any balance from your purchases that is left on the card at the end of the introductory period will attract a higher, ongoing purchase rate.
Instant approval credit cards
If you're looking for a credit card that offers easy and instant approval, there are a few details to keep in mind. First, approval is based on the eligibility criteria for a particular credit card. This means it can vary, but typically will consider factors including your income, residency status, existing assets, current debts and your credit score.
Second, when you apply for a credit card online, you'll usually get a response from the bank or provider within 60 seconds. That's as close to "instant" as it gets in this case. But, once again, you will only be approved if you meet the card's eligibility criteria.
On top of that, it can take up to 10 business days to receive a new card in the post under normal circumstances. Given the current situation, it could take even longer.
Instant digital credit card options
If you want to be able to use a card straight away, you could consider options from providers that offer digital cards or give you the account details as soon as you are approved. For example, Bankwest and Latitude Financial offer approved credit card applicants a digital version of their card via their respective apps.
How could the coronavirus pandemic affect my credit score?
When it comes to your credit card, a missed payment, default or serious infringement will negatively impact your credit score. This is no different to what would happen under normal circumstances.
If you're struggling to make your repayments, make sure to speak to your bank or issuer to discuss your options under their financial hardship policy. During this discussion ask how the creditor will report your repayment history if you enter into a hardship variation and request that it is not listed as a default or overdue payment.
If your creditor rejects your request for an arrangement, they can only list a default 14 days after the rejection. If the lender agrees to the repayment arrangement but does not agree with the credit-reporting part of your terms, you can take further action by reporting it to the Australian Financial Complaints Authority. If the creditor agrees to an arrangement and you are making the agreed upon payments, you are not considered to be in default.
Are you worried about your finances during this time? Don't forget to review your bills - spending a little time on admin, could save you over the weeks and months to come.
Here are some guides on how to save some money on your daily expenses. There are plenty of things you could do, from checking your energy rates, switching to a low-interest credit card, or simply dropping parts of your insurance that you don't need.
Amy Bradney-George is the acting editor for Finder X and a senior writer for credit cards and Finder Green. She has more than 13 years' experience as a journalist and writer, with bylines in publications including The Equity Magazine, The Sydney Morning Herald, ABC News and produce industry website FreshPlaza. Amy has a Bachelor of Arts in Journalism and Drama from Griffith University, and when she’s not putting (virtual) pen to paper, she spends her time as an actress.
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