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NAB launches Australia’s first interest-free credit card

Alison Cheung avatar
Alison Cheung
- 4 min read
NAB launches Australia’s first interest-free credit card

NAB has rolled out Australia’s first no-interest credit card to hit back at buy now pay later (BNPL) services.

While users will not incur interest on expenses put on the bank’s new credit card, StraightUp, a flat monthly fee of up to $20 will be charged for a maximum credit limit of $3,000.

If the customer does not use the card within the month, the monthly fee is not charged. Users may also avoid some usual credit card costs, including late payment fees and foreign currency fees.

The average purchase rate charged by credit cards on RateCity’s database is 16.78 per cent, while the average annual fee and late payment fee is $115 and $20 respectively.

The StraightUp card does not allow cash advances or gambling transactions.

Higher minimum monthly repayments

Despite the lower credit limits, the interest-free card requires customers to make higher monthly repayments, which also includes the monthly fee, than NAB’s low-rate and low-fee credit cards. However, the higher minimum repayments mean users can generally pay off their balance faster, and in turn pay less fees incurred over the long run.

  • A credit card’s minimum repayment is the minimum amount a customer needs to pay off their balance, or what they owe. Usually, this is a percentage of the balance owed. Customers still incur interest charges by making minimum repayments, meaning the balance continues to accumulate interest until the entire debt is paid off.

According to RateCity analysis, if a credit card user spent the maximum credit limit of $3,000 on their StraightUp card and made only the minimum repayments each month, it could take them two years and nine months for them to pay off the debt.

But for someone on the same credit limit using NAB’s low-fee credit card, which charges 19.74 per cent interest and $30 a year in fees, they could be paying off the debt for nearly 42 years if they only made minimum monthly repayments.

This means a StraightUp card user could potentially become debt-free up to about 39 years faster than if they used NAB’s traditional low-fee credit card.

$1,000 credit limit$2,000 credit limit$3,000 credit limit
NAB StraightUp card 
Total fees$400$510$680
Total interestNilNilNil
Time to pay off balance3 years and 3 months2 years and 9 months2 years and 9 months
Max min monthly repayment$35$75$110
NAB low-fee card (rate: 19.74%, fee: $30p.a.)
Total fees$210$900$1,260
Total interest$859$7,588$13,323
Time to pay off balance6 years and 11 months29 years and 11 months41 years and 9 months
Max min monthly repayment (2%)$25$41$62

Source: RateCity.

Personal credit moving with the times

Australians are ditching the plastic, with about 1.4 million fewer credit card accounts than a year ago, the latest figures from the Reserve Bank of Australia (RBA) showed.

The decline has been happening since the start of 2018 with no sign of turning around and credit card providers are taking note, according to Sally Tindall, research director at RateCity.

“Australians’ love affair with credit cards is starting to wane and the banks are doing everything they can to reignite the flame,” she said.

She said credit card companies are also responding as customers turn to BNPL services, which has been seeing “exponential growth”.

“Even the big players in the credit card space, such as CBA and now NAB, have made moves into this arena, knowing that credit cards are no longer kingpin of credit.”

But credit can be problematic for the less disciplined spenders.

“One of the biggest problems with credit – whether it’s a credit card or a buy now pay later service – is that it can encourage people to impulse buy, which can blow a hole in the best laid savings plans,” Ms Tindall said.

NAB’s group executive for personal banking, Rachel Slade, said the interest-free card has turned the idea of credit on its head.

“Credit cards have not really evolved in recent years. But our customers’ needs and expectations are changing and we want to change with them,” she said.

Ms Slade noted that the bank is responding to a rising demand for more flexible credit options that give people more control over their finances.

“StraightUp’s range of features means it is the simplest credit card offering in the market. And with many safeguards in place it can really help customers take control of their spending,” she said.

Eleven credit card providers on RateCity’s database offer some form of payment instalment plan for some of their customers.

Customers can apply for NAB’s StraightUp card from September 10th.


This article is over two years old, last updated on September 9, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent credit cards articles.

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Product database updated 19 Apr, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.