Creditcard.com.au cites National Australia Bank for Not Giving Customers Full Story on Balance Transfer Credit Cards

Creditcard.com.au cites National Australia Bank for Not Giving Customers Full
Story on Balance Transfer Credit Cards

National Australia Bank is allowing only a maximum 70% transfer of existing
credit limit on it balance transfer offers. Comparison site creditcard.com.au
says the limit is short changing consumers and leaving them with an extra
interest rate penalty.

SYDNEY, New South Wales, March 4, 2013 (GLOBE NEWSWIRE) -- via PRWEB -
Australian credit seekers are getting an "unbalanced" credit card offer from
one of the country's Big Four banks. National Australia Bank stands accused
this week by one of the country's leading credit card comparison sites,
creditcard.com.au, of offering Australian consumers a poor deal with its
balance transfer credit card offers.

NAB, alone of out of all the major credit card issuers, has set the maximum
amount of credit limit to a "disappointing" 70%. That is the most a consumer
can transfer. ANZ and Westpac allow 95% and with a Commonwealth Bank credit
card the full 100% can be transferred.

The call for NAB to "get balanced with its balance transfer offers" is msdr by
creditcard.com.au which has compiled a Best balance transfer offers of 2013
snapshot. It features 23 different credit card offers in its balance transfer
section.

Creditcard.com.au founder Roland B Bleyer said: "It's disappointing, because
many credit seekers will find themselves short changed and misled by the NAB
offer. Creditcard.com.au is receiving a record number of balance transfer
enquiries – up 19% on 12 months ago. The problem is that NAB limits the amount
of debt the consumer can transfer which undermines the whole idea of the
balance transfer.

"The attraction of balance transfer cards is they give the consumer some much
needed breathing space in getting on top of debt. The reason people take
advantage of the zero interest rate over a set period of months is to pay down
the balance before the card reverts to the normal purchase rate of interest –
currently around 13%."

Bleyer said that by imposing the 70% maximum NAB is forcing the credit seeker
to keep the remainder of the unpaid balance at a higher rate of interest.

"Take an example based on a level of $3,262 - the nation's average credit card
debt according to the Reserve Bank of Australia RBA. Someone with an
established credit level of $3,500 choosing a NAB balance transfer card would
be forced to leave a debt of $812 on the existing card. That attracts a higher
interest rate cost."

The table shows how much a consumer is "short changed"- the amount that is
left behind at the higher interest rate - when comparing the different credit
levels
Existing Credit Limit 70% transfer max. 95% transfer max.

$5,000 $3,500 -leaves $1,500 $4,750-leaves $250
$7,500 $5,250-leaves $2,250 $7,125-leaves $375
$10,000 $7,000-leaves $3,000 $9,500-leaves $500
$15,000 $10,500 -leaves $4,500 $14,250-leaves $750

Bleyer points out the problem is compounded if card holders don't pay off the
debt that is sitting at the higher level on their existing card and instead
use the new balance transfer card to make a purchase. He said: "As soon as a
person does that, the advantage of the balance transfer is reduced. That's
because any new purchases will attract interest from day one. In the case of
the NAB Premium product, the purchase rate is a high 19.49% p.a. and consumers
will be paying this rate on the purchase until it is paid back. We are warning
all our credit seekers – watch out and don't wipe out the reason you chose the
transfer balance solution in the first place. A balance transfer card, in
essence, should not be used to make purchases during the balance transfer
period."

This article was originally distributed on PRWeb. For the original version
including any supplementary images or video, visit
http://www.prweb.com/releases/2013/3/prweb10464633.htm

CONTACT: Pixel Capital Pty Ltd
         Roland B Bleyer
         roland@pixelcapital.com
         +61 2 9518 8177
 
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