As Aussies second guess the plastic in their wallets, some credit card providers are offering up new ways to pay off big spends, including interest free periods and instalment plans.
Equifax’s Quarterly Consumer Credit Demand Index in March showed that Aussies are turning away from credit cards for big purchases, and instead opting for personal loans.
Part of the appeal of a personal loan over a credit card is no doubt the structured repayments, allowing spenders to better manage their budget and pay off major purchases without the risk of adding a tonne of interest on top.
But credit card providers have a trick up their sleeve yet - many are offering payment instalment plans or interest free periods to make large purchases more affordable and the cards more appealing for spenders.
The newly announced Qantas Premier card is among them, with an offer that gives cardholders 6 months to pay off Qantas purchases with zero interest. Jetstar credit cards come with a similar offer on Jetstar products.
Latitude’s Go Mastercard offers up to 18 months interest free on Apple purchases, plus 6 months interest free on any purchase over $250. On a card with an interest rate of 17.99%, a $2,000 buy with no interest for 6 months stands to save a cardholder up to $179 in interest, assuming they would have otherwise only made the minimum repayment.
ING Direct also announced their long-awaited credit card in mid-May, though its approach to solving the issue of paying off large purchases was slightly different. The Orange One includes a feature that allows customers to pay off their balance at a low 9.99% interest rate in equal monthly instalments over a set term.
“These interest free offers and payment plans might be a good option if you really need to make a large purchase, and don’t have the funds available straight away,” said Mozo Data Manager Peter Marshall.
“Having said that, it’s important to have a plan in place to pay off these large purchases within the given timeframe, and remember not to spend more than you can realistically pay off, otherwise you might find yourself hit with massive interest down the track.”
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