Which banks are offering relief on credit card repayments for COVID-19?

Which banks are offering relief on credit card repayments for COVID-19?

Note: Data updated as of 03/04/2020.

With thousands of Australians losing their jobs due to the catastrophic COVID-19 outbreak, you may be worrying about how you’ll be able to meet your credit card repayments.

Maintaining bills, rent or mortgage repayments is obviously a near impossible task when you’re not earning an income. Luckily, some banks have announced support packages for their customers that include repayment relief and/or freezing credit card repayments.

These relief packages also include the ability to freeze mortgage repayments for up to 6 months, as well as support for small businesses, some fixed rate cuts for home loans and some term deposit rate increases. If you’re a homeowner and want to know if your bank is freezing mortgage repayments, read more here.

The banks offering relief on credit card repayments

The credit card providers offering relief on card repayments amidst COVID-19 are:

  • Australian Unity - repayment relief is available on a case by case basis for up to six months.
  • Bank First - the potential to defer credit card repayments for up to three months. 
  • Bank of Heritage Isle - the potential to defer credit card repayments for up to six months.
  • CUA - repayment relief is available on a case by case basis, with no fees for replacement cards.
  • Greater Bank - the potential to defer credit card repayments for up to six months as of 1 April, as well as the waiving of interest.
  • HSBC - the potential to defer credit card repayments for up to six months.
  • ING – the potential to defer credit card repayments for three to six months.
  • Latitude Financial - the potential to reduce monthly repayments and interest. 
  • Macquarie Bank – the potential to defer credit card repayments for up to six months.
  • Newcastle Permanent – the potential to defer credit card repayments for up to six months.
  • Police Bank - the potential to defer credit card repayments for up to six months.
  • Unity Bank - repayment relief is available on a case by case basis.

Some credit card providers have instead responded by cutting their credit card interest rates. This is typically unheard of following an RBA cash rate cut, but the moves are a sign that lenders of all types are taking the threats of the pandemic seriously.

Credit card providers who announced cuts to their credit card rates:

  • Auswide bank - to reduce its Low Rate Visa credit card to 8.20 per cent.
  • Heritage Bank - to reduce its credit card rates by 25 basis points.
  • NAB - to reduce its NAB Low Rate Classic Card by 100 basis points.
  • Queensland Country Bank – to reduce its credit card rates by 25 basis points.

What if my bank isn’t on that list?

Some lenders haven’t yet outrightly said they’re offering credit card repayment freezes, but many may be able to offer some form of hardship support. 

For example, Coastline Credit Union have stated that its COVID-19 Loan Hardship Relief Package only applies to specific home, investment and business loans. But if you are struggling, you can reach out to its specialists to submit an application for financial hardship.

This may typically be the case for most of the banks who’ve announced some form of a hardship support package but haven’t specified credit cards as being included.

Call up your credit card provider or visit its website to see if you can speak with its customer support team through live chat. Here you can let them know you need help with your repayments, and they can hopefully offer support and take you through the hardship application process.

What other options are there?

If you’re seriously struggling with debt and need a little breathing room, one option to consider is using a balance transfer credit card. They allow you to transfer the balance of your existing credit card debt to a new card with zero per cent interest for a set period of time.

However, this can be a risky option as balance transfer credit cards require a fair bit of discipline. You’ll want to use the zero per cent interest term to actually pay off your balance. If you don’t, you’ll start accruing interest at the end of said term, and these interest rates are generally higher than average. Further, if you use the balance transfer card to make new purchases, you’ll start accruing interest immediately on these purchases. This can cause your existing debt to snowball out of control.

You would also be unlikely to get approval if you had lost your job. You’d need to meet requirements with the balance transfer credit card provider to be approved. These generally include a minimum income, anywhere from $15,000 - $30,000 and more.

If you were to freeze your credit card repayments, and then get another job, you may want to revisit the idea of a balance transfer credit card.

  • Also, don’t be afraid to ask for help outside of your bank. The Australian government has free financial counselling services available, along with their National Debt Helpline – 1800 007 007.

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Learn more about credit cards

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

Does ING increase credit card limits?

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so. 

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000. 

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.

How do I apply for a BOQ credit card limit increase?

If you’re an existing BOQ customer, you can request a BOQ credit card limit increase over a phone call. However, you should remember that owning and using a credit card is a matter of financial responsibility, so it might be worth thinking this decision through. 

When requesting a credit card limit increase, you’ll need to be just as responsible in terms of how much you earn and can set aside to repay the outstanding card balance. A credit card company may approve a credit limit increase only if you can show that you have either the income or the disposable income, which is the amount you have left after all expenses have been paid out.

For this purpose, you may need to submit your latest income documents and bank statements for an increase. You may want to estimate how much you usually have left after deducting your expenses, and then use this amount to try and convince the credit card company. Also, you may prefer to pay off the card balance in full each month and thus avoid paying interest on the card, helping you back up any claims of financial responsibility, as well. 

Remember that you may not be able to apply for a credit card limit increase beyond any limitations on the type of card you own. For instance, if you own a card whose ceiling is $10,000, and your current limit is $5,000, you won't likely be able to apply for a $10,000 credit card limit increase.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

How to increase ME Bank credit card limit?

If you want your  ME bank credit card limit increased, you’ll have to fill the “credit card limit increase request form” and send it to the bank via post, email, or fax. The requirements for increasing the credit limit include:

  • You should have the card for at least six months;
  • Your income has increased; and
  • Your debt liabilities have decreased.

What can I do about my Commonwealth Bank expired credit card?

You’ll typically receive your replacement Commonwealth Bank credit card before your current one expires. 

Once you receive the replacement card, you may need to update the new card with all the direct debits that you had set up on your expired Commonwealth Bank credit card. These could include insurance payments, electricity or gas bills, and monthly entertainment subscriptions.

To see a list of all your regular payments in NetBank, follow these steps:

  1. Log on to NetBank
  2. Click on ‘settings’
  3. Go to ‘product requests’, and select ‘credit card regular payments’. 

If you don’t use NetBank, you can see the list of your regular payments on your most recent credit card statement. Keep in mind, this list may not be complete and you should also check your past statements or your transaction history. 

If you haven’t received your replacement card before your current card expires, call 13 22 21 and the bank will send a new card to you. 

It is important that you safely discard your expired credit card. This often means cutting it up with scissors and throwing it out.