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Westpac launches 0% interest credit card to take on the buy now, pay later sector
Westpac has announced it’s launching a no interest credit card, similar to those launched by big bank competitors, CBA and NAB last year.
Westpac’s ‘Flex’ credit card, available to customers in the next couple of months, will have a maximum credit limit of $1,000 with no interest charges, no late fees and no currency conversion fees.
The card has a $10 monthly fee, which is waived if you don’t use the card or pay the balance down before the due date each month.
Since launch, CBA and NAB have said their no interest cards have been their most popular new credit cards.
HOW DO THE BIG BANK CARDS COMPARE?
The biggest difference between Westpac Flex and its big bank competitors is the maximum credit limit is just $1,000 compared to $3,000 for the CBA and NAB cards.
| Westpac Flex | CommBank Neo | NAB StraightUp | |
| Interest charges | 0% | 0% | 0% |
| Late payment fees | $0 | $0 | $0 |
| Foreign exchange fees | 0% | 0% | 0% |
| Max credit limits | $1,000 | Between $1,000 - $3,000 | Between $1,000 - $3,000 |
| Monthly fees | $10 / mth
Waived if customers pay the amount owing for the previous month on time. | $1K limit = $12 / mth
$2K limit = $18 / mth $3K limit = $22 / mth Waived if you don’t use the card and have a $0 balance. | $1K limit = $10 / mth
$2K limit = $15 / mth $3K limit = $20 / mth Waived if you don’t use the card and have a $0 balance. |
| Minimum monthly repayments | $40 per month | 2% of balance or $25, whichever is higher. | Between $35 and $110, depending on credit limit. |
| Other | Access to offers and perks via loyalty program | Access to offers and perks via loyalty program | N/A |
Source: RateCity.com.au
RateCity.com.au research director, Sally Tindall, said: “Bigger is no longer better when it comes to credit cards, in fact, tiny credit limits and zero interest are new the must haves.”
“Over the last year Westpac has watched NAB and CBA win back Gen Z and millennials with their zero percent cards, and it wants in on the action,” she said.
“Westpac is bending over backwards to serve up what younger Australians say they need and want. The bank already offers 18 to 29-year-olds’ savings rates of up to 2.5 per cent. Now its targeting millennials looking for credit with fewer strings attached.
“The bank was quick to partner up with buy now, pay later market leader Afterpay. Now it’s aiming to expand its own Gen Z and millennial customer base via this new zero percent credit card.
“Like CBA and NAB, Westpac is offering no interest to pay, no currency conversion fees and no late fees. However, Westpac has put more rigorous checks and balances on this new card, with a credit limit of just $1,000 and higher minimum repayments that force customers to clear their debt faster.
"Westpac’s new Flex card might be ‘interest free’, however, customers could end up spending $120 a year in fees if they don’t pay off their debt in full each month.
“For over five years the banks have watched buy now, pay later providers such as Afterpay raid their customer base. The banks tried to beat them, now they’re looking to join them in an effort to win these customers back,” she said.
Westpac Flex vs BNPL
With buy now, pay later providers attracting millions of customers between them, the big banks have been forced to come up with a credit card to compete.
How do the new cards compare to BNPL?
| Westpac Flex | Afterpay | Zip Pay | |
| Interest rate | 0% | 0% | 0% |
| Credit limit | Up to $1,000 | $2,000 | $1,500 |
| Late fees | $0 | $10 per late repayment. An extra $7 if you don’t pay in 7 days. Max fee 25% or $68 whichever is lower. | A late fee of $5 after 21 days of not paying the minimum. |
| Ongoing fees | $10 per month when in use and debt owing at due date. | $0 | $6/month if you have money owing. |
| Where can you use it? | Anywhere Mastercard is accepted. Not for gambling or cash advances | Affiliated retailers only. | Anywhere a credit card is accepted. |
| Repayment schedule | Min $40 per month | 4 instalments over 6 – 8 weeks | Minimum repayment of $40. |
Source: RateCity.com.au
Disclaimer
This article is over two years old, last updated on October 20, 2021. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent credit cards articles.
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Product database updated 23 Nov, 2024
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