LEADING BNPL SAVES CONSUMERS $100M IN CREDIT CARD FEES AS MAJOR AUSTRALIAN BANK DOUBLES DOWN ON HIGH-RATE CREDIT CARDS
Afterpay in Australia have released a report by Accenture today claiming the leading Buy Now Pay Later platform has saved its users $110 million (AUD) in credit card fees, as calls for a curb on high interest cards intensify.
The new data follows accusations that anti-BNPL Australian bank ANZ is doubling down on attempts to lock customers into high-fee credit card deals ahead of new financial regulations that might outlaw them.
ANZ is offering an $800 gift card and 180,000 reward points but the card also carries a hefty 20.24% interest rate and an annual fee of $375, which the new regulations may consider non-compliant because ASIC data shows 43% of customers of such cards are revolving in debt.
When questioned about the credit card at a Parliamentary Inquiry into the Big 4 banks last week, ANZ CEO Shayne Elliott conceded that almost half of ANZ’s customers are using their credit card as an expensive form of debt and paying more than 20% interest on their purchases.
The calls for Aussies to ditch credit cards are now intensifying even further since a survey of 10,000 revealed 91% carry credit card debt, almost half of which totals more than $5,000 – and the Victorian government called for card rates to be tied to the record-low cash rate.
Consumer campaigner and SmartWayToPay spokesman David Liston is calling on Aussies to fight back against this huge amount of debt and rethink their relationship with high interest credit cards.
The Quit-the-Card trend has already begun and recent figures
show over the past year Australians: Have paid down over $7 billion of credit card debt, and Cancelled almost 1 million credit cards, however As a nation we still pay interest on over $20 billion in credit card debt.
Just last week 4 major consumer organisations added their support
to fresh calls for the Federal Government to begin an inquiry into the exorbitant fees and interest charged on credit cards. Liston said:
ANZ is milking the high-rate credit card cow for all it’s worth while it still can, but its days are numbered. These products are dangerous and they’re being sold to people who can’t afford them.
There’s mounting pressure to reform the system so out of sync with the cash rate, mortgage rates and savings rates. The economic outlook is still uncertain especially with the end of JobKeeper,
There is no reason people should be paying interest on high interest credit cards. Especially while there are no fee and low fee alternatives widely available. Quitting the card is a great first step.
Today’s Economic Impact Report by Afterpay claims it’s zero interest and account fee mode has saved its users $110 million in credit card fees. This is a positive move in the right direction.
In every month of 2020, BNPL spending in Australia experienced year over year growth in excess of 40 per cent – while the total value of credit card spending declined every month from March 2020 to the end of the year.