Which banks are offering relief on credit card repayments for COVID-19?

Note: Data updated as of 03/04/2020.

With thousands of Australians losing their jobs due to the catastrophic COVID-19 outbreak, you may be worrying about how you’ll be able to meet your credit card repayments.

Maintaining bills, rent or mortgage repayments is obviously a near impossible task when you’re not earning an income. Luckily, some banks have announced support packages for their customers that include repayment relief and/or freezing credit card repayments.

These relief packages also include the ability to freeze mortgage repayments for up to 6 months, as well as support for small businesses, some fixed rate cuts for home loans and some term deposit rate increases. If you’re a homeowner and want to know if your bank is freezing mortgage repayments, read more here.

The banks offering relief on credit card repayments

The credit card providers offering relief on card repayments amidst COVID-19 are:

• Australian Unity - repayment relief is available on a case by case basis for up to six months.
• Bank First - the potential to defer credit card repayments for up to three months. 
• Bank of Heritage Isle - the potential to defer credit card repayments for up to six months.
• CUA - repayment relief is available on a case by case basis, with no fees for replacement cards.
• Greater Bank - the potential to defer credit card repayments for up to six months as of 1 April, as well as the waiving of interest.
• HSBC - the potential to defer credit card repayments for up to six months.
• ING – the potential to defer credit card repayments for three to six months.
• Latitude Financial - the potential to reduce monthly repayments and interest. 
• Macquarie Bank – the potential to defer credit card repayments for up to six months.
• Newcastle Permanent – the potential to defer credit card repayments for up to six months.
• Police Bank - the potential to defer credit card repayments for up to six months.
• Unity Bank - repayment relief is available on a case by case basis.

Some credit card providers have instead responded by cutting their credit card interest rates. This is typically unheard of following an RBA cash rate cut, but the moves are a sign that lenders of all types are taking the threats of the pandemic seriously.

Credit card providers who announced cuts to their credit card rates:

• Auswide bank - to reduce its Low Rate Visa credit card to 8.20 per cent.
• Heritage Bank - to reduce its credit card rates by 25 basis points.
• NAB - to reduce its NAB Low Rate Classic Card by 100 basis points.
• Queensland Country Bank – to reduce its credit card rates by 25 basis points.

What if my bank isn’t on that list?

Some lenders haven’t yet outrightly said they’re offering credit card repayment freezes, but many may be able to offer some form of hardship support. 

For example, Coastline Credit Union have stated that its COVID-19 Loan Hardship Relief Package only applies to specific home, investment and business loans. But if you are struggling, you can reach out to its specialists to submit an application for financial hardship.

This may typically be the case for most of the banks who’ve announced some form of a hardship support package but haven’t specified credit cards as being included.

Call up your credit card provider or visit its website to see if you can speak with its customer support team through live chat. Here you can let them know you need help with your repayments, and they can hopefully offer support and take you through the hardship application process.

What other options are there?

If you’re seriously struggling with debt and need a little breathing room, one option to consider is using a balance transfer credit card. They allow you to transfer the balance of your existing credit card debt to a new card with zero per cent interest for a set period of time.

However, this can be a risky option as balance transfer credit cards require a fair bit of discipline. You’ll want to use the zero per cent interest term to actually pay off your balance. If you don’t, you’ll start accruing interest at the end of said term, and these interest rates are generally higher than average. Further, if you use the balance transfer card to make new purchases, you’ll start accruing interest immediately on these purchases. This can cause your existing debt to snowball out of control.

You would also be unlikely to get approval if you had lost your job. You’d need to meet requirements with the balance transfer credit card provider to be approved. These generally include a minimum income, anywhere from $15,000 - $30,000 and more.

If you were to freeze your credit card repayments, and then get another job, you may want to revisit the idea of a balance transfer credit card.

• Also, don’t be afraid to ask for help outside of your bank. The Australian government has free financial counselling services available, along with their National Debt Helpline – 1800 007 007.

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