Westpac pauses credit card interest charges for COVID-19

Westpac pauses credit card interest charges for COVID-19

One of Australia’s big four banks, Westpac, has announced it will support Australians who are doing it tough due to COVID-19 by allowing eligible customers to pause their credit card interest charges and repayments for a three-month support period.

According to Westpac, for three months, eligible customers will not be:

  • Charged or accrue any interest on new card purchases or cash advances (note cash advance fees will still apply).
  • Charged or accrue any interest on an existing amount owing on the card.
  • Required to make any repayments.

However, it’s important to keep in mind that pausing credit card repayments may lead to snowballing debt if you’re not careful.

Summary of major Australia bank credit card options for COVID-19

Lender Support
Westpac Pause credit card repayments for 3 months, without charging interest on existing debt or new purchases and cash advances.
CBA Late fee charges waived. Customers can move onto instalment plans (these typically have lower interest rates). Contact the bank to discuss other hardship measures, which could include moving to a low rate card and a repayment pause.
NAB Minimum monthly repayments reduced to 0.05 per cent of closing balance or $5 (whichever is greater) for at least three months. $15 late fees waived. Lowering NAB’s Low Classic card interest rate by 1.00 per cent.
ANZ Customers can move to a lower rate credit card and have the credit limit lowered. Other financial hardship assistance will be offered on a case by case basis.
ING Repayment pause of up to 6 months. Inactive cards will have balance transferred to an instalment plan (interest rate of 9.99 per cent).
HSBC Repayment pause of up to 6 months, can request temporary credit limit increase.

Time to stay on top of debt

The ability to pause interest repayments is a significant gesture of support from Westpac.

Westpac Chief Executive, David Lindberg, said: “Since announcing our consumer COVID-19 support package last month, we have had more than 40,000 credit card customers come to us seeking additional support with managing their finances.”

“These measures will allow customers experiencing financial stress as a result of COVID-19 to have a temporary reprieve from repayments and interest.

“We are working hard to help all of our customers affected by this crisis and are changing our processes and policies to ensure we can support the individuals and families who need extra assistance,” said Mr Lindberg.

However, if your bank has allowed you to pause your credit card repayments but not your interest charges, you may find yourself with more debt than you started with. Interest will continue to accrue on any outstanding debt, especially if you’re unable to pay any of the balance off in your ‘pause’  period.

Further, it’s important to keep in mind that if, after a pause period, you’re still unable to make repayments, your debt may grow out of control.

You may need more than a temporary fix to get on top of your credit card debt.

Credit card debt tips during COVID-19

  1. Work on your budget and see if there’s anything you can cut out (weekly takeout meal, Netflix subscription etc.) and put towards your credit card debt.
  2. Look for things around the house that you may be able to sell on gumtree, eBay or FaceBook Marketplace for some extra cash.
  3. Consider switching to a lower rate credit card within your bank. This might help to take the pressure off if you have a credit card with a high interest rate. These tend to be no-frills credit cards though, so you may miss out on perks like rewards programs while you pay off your debt.
  4. Consider taking out a balance transfer so you have more time to work off your debt. Keep in mind balance transfer cards can come with costly interest rates if you make any additional purchases on the card, or if you don’t pay off your debt during the zero per cent balance transfer period.
  5. Contact your bank. See how your credit card provider may be able to assist you in this time through its hardship support programs.
  6. If you need additional support, consider reaching out to the National Debt Helpline on 1800 007 007.

Big four banks – lowest rate credit cards

Bank Credit Card Rate
Westpac Lite Card


CBA Essentials


ANZ Low Rate


NAB Low Rate Card


*Rate drops from 13.99% to 12.99% from 27 April 2020

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



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Learn more about credit cards

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. 

How is credit card interest charged?

Your credit card will be charged interest when you don’t pay off the balance on your credit card. Your card provider or bank charges you the individual interest rate that is associated with your card, which is usually between 10 and 20 per cent. 

The interest will be added onto your bill each month or billing period if you don’t pay off the balance, unless you are in an interest-free period.

You will be charged interest on anything that hasn’t been paid for inside the interest-free period. Usually you will receive a notice on your bill or statement saying you will be charged interest so you have some form of notice before you’re charged.

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. 

How does credit card interest work?

Generally, when we talk about credit card interest, we mean the purchase interest rate, which is the interest charged on purchases you make with your credit card.

If you don’t pay your full balance each month (or even if you pay the minimum amount), you are charged interest on all the outstanding transactions and the remaining balance. However, interest is also charged on cash advances, balance transfers, special rate offers and, in some cases, even the fees charged by the company.

The interest rate can vary, depending on the credit card. Some have an interest-free period, otherwise you start paying interest from the day you make a purchase or from the day your monthly statement is issued. So avoid interest by paying the full amount promptly.

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.

How to calculate credit card interest

Credit card interest can quickly turn a manageable balance into unmovable debt. So being able to understand how interest rates translate into dollars is an important skill to acquire.

The common mistake people make is focusing on the credit card’s annual percentage rate (APR), which often sits between 15 and 20 per cent. While the APR does provide a rough idea of how much interest you’ll pay, it’s not entirely accurate.

This is because you actually accrue interest on your balance daily, not annually. So, you need to work out your daily periodic rate (DPR). To do this, divide your card’s APR by the number of days in a year (e.g. 16.9 per cent divided by 365, or 0.05 per cent). You can then apply this figure to the daily balance on your credit card.

How to pay a credit card from another bank

Paying or transferring debt from one lender to the other is called a balance transfer. This involves transferring part or all of the debt from a credit card with one lender to a credit card with another. As part of the process, your new lender will pay out the old lender, so that you now owe the same amount of money but to a new institution.

Many credit card providers offer an interest-free period on balance transfers to help new applicants better handle their debt. During this period, cardholders are not required to pay interest on the debt they brought over from the other card. This can be a great opportunity for consumers to pay off credit card debt with no interest. There are often fees associated with balance transfers; normally, these are a percentage of the amount transferred.

So make sure you read the terms and conditions of the card before transferring any debt across.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit 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 do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How to get rid of credit card debt

  1. Calculate your debt. Credit card calculators make it easy to determine the repayments required to chip away at your debt in the shortest timeframe possible for your budget.
  2. Repayment plans. Take some time to formulate a credit repayment plan. Consider increasing your income, scaling back your lifestyle or refinancing.
  3. Talk to your credit provider. If you’re still struggling with your debt, give your credit provider a call. You may be able to come to a new arrangement.

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.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

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.