Zip offering 3% cashback on Christmas purchases

From yesterday, Zip customers using Tap & Zip, a new mobile payment platform introduced by Zip, can get up to 3% back on all transactions up to a value of $30 per transaction. 

According to Zip, this can be used anywhere that accepts Visa on everyday items like groceries, petrol as well as any upcoming Black Friday and Christmas purchases.

Credit card use fell dramatically over the coronavirus period, with Australians paying off their debts in record numbers while also cancelling more than 100,000 of them each month.

Buy now, pay later (BNPL) platforms meanwhile saw a surge in both new customers and purchases during the same time period. 

Zip itself recorded a 62% increase in customers over the 2020 financial year.

Zip Chief Customer Officer Steve Brennen said consumers are increasingly turning away from the traditional credit models because they aren't fit for purpose. 

“By Zipping their everyday purchases, consumers are choosing a fairer, more transparent and flexible way to pay for goods and services," Mr Brennan said. 

"Always interest free, they now have the added bonus of 3% back on every purchase made by tapping their phone.

“Christmas is a time for giving, and our customers want to be able to make the most of the season without getting stung with interest they’ll be paying back for years to come.

"This new 3% bonus offer lets us give something back to customers, no matter how they’re planning to spend the holidays this year.”

Cashback offers not a reason to overspend 

While many Australians have changed their credit behaviours for the better this year, there are still some concerning signs that too many people still intend to use credit more than they should. 

Just last week, the Australian Securities and Investments Commission (ASIC) found one in five consumers had missed BNPL payments from providers like Zip, AfterPay, and Humm.

With a tempting 3% cashback offer giving customers up to $30 back each time they buy something, the temptation to overspend and accrue unnecessary debt using BNPL platforms could cause problems for Aussies this Christmas. 

However, Mr Brennen told Savings.com.au that only one in 100 Zip customers makes late repayments each month, compared to the one in five reported by ASIC, and said it is still important to ensure Zip is lending responsibly. 

"Because responsibility is in our DNA, we will only lend to consumers with good credit history and those that can afford repayments," he said.

"We’ve performed credit and identity checks on every single applicant since inception, and where customers connect their bank account, we can assess an individual's circumstances understanding all their financial commitments."

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.

Heritage Bank offers new 0% balance transfer 

Heritage Bank has today offered a new 0% balance transfer rate, available for both new and existing customers for 12 monhs on its Gold Low Rate and Platinum Credit Cards.

As this is a balance transfer and not a 0% credit card like the ones recently introduced by the likes of Commbank and NAB, this is mainly to be used for paying off debts, with Heritage saying:

"If making purchases, we suggest the customer check the interest rate they’ll be charged on these and whether they get any interest free days.” 

Speaking of credit cards more broadly, Heritage CEO Peter Lock said they can still have a role to play despite the popularity of BNPL. 

"Buy now pay later services seem attractive but miss any payments and the late fees can soon add up,'' Mr Lock said. 

"Plus there is usually no credit check to make sure you can afford the debt you’re locking yourself into, so you can quickly find yourself in over your head if you aren’t careful.”

See also: Does buy now, pay later affect your credit score?

Mr Lock also reiterated the important of long-term budgeting to help reduce financial and emotional stress. 

“Credit cards remain a fantastic back-up option, especially in times of emergency,” he said.

“Our new offer allows people to move the money they already owe to a new Heritage credit card without having to worry about the additional stress of paying interest for 12 months."

Photo by Jon Cellier on Unsplash