Westpac debuts credit card installment feature SmartPlan
Westpac has launched SmartPlan, a new credit card feature aimed at helping customers pay off their overall debt or individual purchases through a series of monthly installments.
Described as an online self-service tool which helps customers manage their credit card balances, Westpac cardholders can choose between paying off their entire balance in installments, or repay individual purchases of $500 or more in chunks.
This news comes almost one month after ING Direct unveiled Orange One its long-promised first credit card to existing customers, which offers a lower interest rate to those who opt-in to a payment plan.
Both Westpac’s SmartPlan and ING Direct’s repayment feature work similarly to a personal loan repayment structure, as they give consumers the certainty of set repayments.
The move by banks into this space is timely, given the rise in popularity of new payment platforms like Afterpay and zipMoney which already provide an alternative way to shop and pay for purchases in installments.
According to Peter Marshall, Mozo’s Product Data Manager, Aussies can expect to see even more innovative payment features crop up this financial year.
“The launch of Westac’s SmartPlan feature is a nod to the future of credit card repayments, where consumers will have the ability to repay their debts more efficiently,” he said.
“I suspect that some providers will follow suit in the next 12 months and start introducing their own installment options to customers. And when that happens competition will ramp up, which can only be a good thing for Aussie borrowers comparing credit cards.”
In the meantime, credit card providers are expected to face a series of reforms aimed at improving the nation’s $52 billion debt hangover.
The upcoming credit card reforms that were announced by Treasurer Scott Morrison recently, include simplifying the way interest gets calculated and changing how banks assess credit card affordability.