NAB to reform credit card payments

Credit card users in Australia could be tempted to compare the market following an announcement by a leading financial institution.

National Australia Bank (NAB) has announced that it is to reform the way payments and balance transfers are managed on its credit card accounts.

The move, which NAB said is the first of its kind by a major bank, is set to lead to lower interest payments for credit card users.

More than 1.5 million customers will benefit from the moves, which come after pressure from consumer advocacy groups and are in line with proposals made by the Federal Government during the recent election campaign.

Lisa Gray, NAB's personal banking group executive, said: "Consumers may be unaware that typically across the finance industry their credit card repayments are used to pay off balances attracting the lowest interest rate first, leaving the higher interest balance to attract interest charges.

"This will no longer be the case for NAB customers. Credit card transactions attracting the highest interest rate will be paid off before the lower interest rate – helping to reduce the overall interest cost to our customers."

This article is brought to you by Mozo – Helping you compare credit cards