Westpac to launch credit card with single-digit interest rate
Westpac's new no-frills credit card will boast interest rates even lower than ANZ.
Last week, ANZ dropped its credit card interest rates to as low as 12.49% p.a. and 11.49% p.a. across its platinum and low rate cards, fuelling the flames for what we predicted would be an interest rate war between the banks. Well, it appears that Westpac is the first to make a counterattack with its new credit card.
Apparently, Westpac is working on a new basic credit card that boasts an interest rate of less than 10%, a standard interest rate that will be a first for any of the Big Four. As well as a new low-interest rate, the card will have an instalment offer that will allow cardholders to make purchases or pay down their balance at an even lower rate. Not only is this new for Westpac and its customers, it’s also an Australian-first in credit card repayments.
The card is set to have an annual fee of little more than $100 and a predicted maximum credit limit of $4,000. A no-frills card designed to help cardholders manage their cash flow while minimising standard card costs, don’t expect the card to come with complimentary travel insurance or the ability to accept balance transfers. While the details haven’t been confirmed, cardholders can look forward to between 44 and 55 interest-free days when you pay your balance in full.
Westpac has been working on the card, dubbed "Project Lite", for the last four months and it will still be a few more until the new low rate card lands on the market. Not including credit cards with 0% on purchases for a promotional period, the Westpac Low Rate credit card currently offers the bank's lowest standard interest rate of 13.49% p.a. While a number of Aussie credit unions offer credit card interest rates lower than 10%, this will be the first time one of the Big Four banks has dropped its rates to one digit.
Given the noise that ANZ’s rates drop caused last week, it’s only a matter of time before Commonwealth Bank and NAB make their attacks in the battle. Major lenders have failed to lower their rates in response to the Reserve Bank of Australia’s repeated cuts to the cash rate over the last six years, so Aussies in the market for a new credit card are sure to benefit from this interest rate standoff between the banks.