Taking its cues from NAB, which rolled out Australia’s first interest-free credit card yesterday with the StraightUp credit card, CBA has announced the upcoming launch of CommBank Neo.
The CommBank Neo card will give customers up to $3,000 of credit. There are also no interest payments, no late payments, and no foreign currency fees - only a fixed monthly fee depending on your credit limit will apply.
The three credit limits with corresponding monthly fees are detailed below. However, fees will be waived for the month if the card isn’t used and you have an outstanding balance of $0 during the statement period.
- $12 monthly fee for $1,000 credit limit
- $18 monthly fee for $2,000 credit limit
- $22 monthly fee for $3,000 credit limit
CBA’s retail banking executive, Angus Sullivan said the card will be a worthwhile addition in customers’ wallets, chiefly for its simplicity and the benefits available to shoppers.
“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,” he said.
As an example, CBA said a customer can receive a $15 cash back offer when shopping at one of the 80+ participating retailers. This means cardholders can potentially recoup the cost of their monthly fee.
The foray into interest-free lending comes as scores of young consumers turn their back on traditional credit products in favour of buy now, pay later services, which allow shoppers to spread out payments for purchases over several installments.
Players like Afterpay and Zip Pay have dominated this space by offering zero-interest payment plans with the flexibility to pay off balances over time. The CommBank Neo and NAB StraightUp card signal a willingness to embrace this shift.
According to CBA, CommBank Neo will be available in late 2020. A version for business customers is also currently in the works, and will be available in early 2021.
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