CommBank launches interest-free credit card, just a day after NAB

author-avatar By on September 11, 2020
CommBank launches interest-free credit card, just a day after NAB

Source: CBA

Commonwealth Bank has announced the launch of a no-interest credit card, CommBank Neo.

CommBank's announcement comes just a day after NAB announced the first ever Australian no-interest credit card, however, the NAB StraightUp Card.has slightly lower fees than the CommBank Neo card.

CommBank Neo will provide customers with up to $3,000 credit, with a monthly fee dependent on your credit limit, and has no interest payments, no late payments, and no foreign currency fees.

Customers will be refunded their monthly fee if they have no purchases in a month and the card balance is zero.

The credit limits and their monthly fees are: 

  • $1,000 credit limit: $12 monthly fee
  • $2,000 credit limit: $18 monthly fee
  • $3,000 credit limit: $22 monthly fee

In contrast, the NAB StraightUp Card has a $10, $15, and $20 monthly fee for the same credit limits respectively. 

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.

Provider
Total interest
rate p.a.
Base interest
rate p.a.
Bonus interest
rate p.a.
 
Online Saver
1.55%
 
0.35%
 
1.20%
4 months
Go to site
Fast Track Saver
1.50% 0.20% 1.30% Go to site
2.00%
 
0.55%
 
1.45%
4 months
More details
1.90%
 
0.80%
 
1.10%
4 months
More details
1.65% 0.15% 1.50% More details

*Data accurate as at 01 October 2020. Rates based on a savings balance of $10,000. Introductory bonus interest rate products not included. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions and for any applicable fees and charges.

Unlike the NAB card however, CommBank Neo will offer eligible customers a range of benefits through cashback offerings from a range of more than 80 retailers. 

Angus Sullivan, Commonwealth Bank's Group Executive of Retail Banking Services, said the cashback offering made the monthly fee even greater value for customers. 

“Using the full power of our innovation means CommBank Neo will also offer access to discounts and cash back offers with a range of retailers through CommBank Rewards,” Mr Sullivan said.

“We are really excited to launch our simple, easy to understand product which we believe offers great value to our customers.”

cbaneocard

Source: CBA

CommBank Neo will be available in late 2020 and will be able to be used anywhere Mastercard is accepted. 

There will be a minimum repayment of $25 or 2% of your closing balance, whichever is greater. 

The card doesn't provide access to cash advances or gambling. 

CBA also plans to launch a similar product for small business customers in early 2021, named CommBank Neo Business. 

Is it cheaper than a regular credit card? 

Credit cards are often maligned for their high fees, so an interest free credit card may sound great in theory, but is it all it's cracked up to be? 

If you were to spend $1,000 with a $3,000 limit and took 12 months to repay this, you'd be charged $264 in fees on the CommBank Neo card.

In comparison, if you were to take 12 months to pay $1,000 off a credit card with no annual fee and an interest rate of 15.0%, you'd be charged around $84 in interest.

So the CommBank Neo card would actually cost $180 more than a regular credit card in this specific example. 

Using the same example, the NAB StraightUp Card would charge $240 in fees, $24 less than the CBA card and $156 more than a regular credit card. 


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Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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