COVID-19 Credit Cards FAQs

Answers about COVID-19 (coronavirus) and credit cards

How does the current pandemic situation affect credit cards? We’ve compiled answers to some of the questions we are receiving from customers. The situation is evolving, so we’ll keep this page up to date with new information as it is released.

COVID-19 Credit Cards FAQs

How are credit card holders being supported during this COVID-19 pandemic?

The banks have implemented a new measure on credit ratings to help Australians who have lost their job or incurred significant income losses due to COVID-19.

As such, any Australian granted a six-month repayment deferral on credit products, such as a credit card, won’t have their credit rating affected – if they were up-to-date with repayments prior to COVID-19.

During the six-month deferral, you will still accrue interest, it won’t be paused, it’ll be added to the balance. Therefore, at the end of the six-month deferral period, you may have higher repayments. To help keep your balance manageable, certain lenders are reducing the minimum monthly payment.

For more information specific to your situation, please read your policy product disclosure statement (PDS) or contact your lender directly.

Last updated: 09/04/2020

With COVID-19, is now a good time for debt consolidation?

Whether or not debt consolidation is right for you will come down to your circumstances. You might find it helpful combining your current debts under one loan with a more competitive interest rate.

However, it’s important that you’re aware of the terms and conditions of a debt consolidation loan, as well as if you’d need to pay any fee for breaking your current loans.

Last updated: 26/03/2020

Which known COVID-19 scams/fraud involving my credit card should I be aware of?

In trying times, scammers often try to take advantage of the vulnerable. In fact, the Australian Competition & Consumer Commission (ACCC)’s Scamwatch has received 94 reports of COVID-19-related scams since 1 January - and those figures have likely increased.

These scams may appear in the form of phishing scams sent via email or text messages.

If you suspect you’ve been scammed or have received a suspicious email or text, contact your bank or financial institution immediately. As always, ensure you keep your credit card details - and all personal details - secure.

Read more tips about credit card security on our blog.

Last updated: 26/03/2020

Does my credit card’s travel insurance cover COVID-19?

Most travel insurance policies typically don’t cover claims related to pandemics – others may offer limited cover. What’s more, credit card travel insurance only covers the expenses you paid for using your credit card. Please refer back to your provider’s Product Disclosure Statement (PDS) and terms and conditions to find out if your credit card’s travel insurance covers you for COVID-19.

Last updated: 26/03/2020

Are instant approval credit cards still available during COVID-19?

At the time of writing, it’s business as usual for instant approval credit cards; lenders are still following their lending guidelines to help ensure the credit card is suited to your financial circumstances.

When applying for an instant approval credit card, keep in mind many lenders offer an introductory interest rate (e.g. a low or no-interest rate) for a set period. Once this period transpires, your interest rate will likely be higher.

If you’re looking for a credit card, be sure you compare your options to find one with a competitive rate, fees and features. Our comparison service helps take the legwork out of this crucial first step.

Last updated: 26/03/2020

Are cash advances a good way to fund COVID-19 isolation?

Whether or not a cash advance is a good option for you during this time depends entirely on your financial situation.

Cash advances can provide immediate relief; however, you must ensure you’re fully aware of all associated fees and charges. Remember; interest on cash advances is charged from day one, and at the time of writing, lenders have not put into place cutting interest on these.

If you need financial assistance, you might like to approach your bank and apply for their financial hardship program. Government assistance may also be a way for you to get back on your feet.

Last updated: 26/03/2020

What happens if I need to increase my credit card limit?

Lenders will continue to assess whether or not you can meet the criteria of an increased credit card limit. They will take into account your income as part of this assessment.

If you’re struggling to make your credit card repayments and are dealing with financial hardship, it’s important you contact your lender right away. Lenders have different financial hardship programs that may help you get back on your feet.

What’s more, any Australian granted a six-month repayment deferral on credit products, such as a credit card, won’t have their credit rating affected – if they were up-to-date with repayments prior to COVID-19.

You may also be eligible for government assistance. Visit Australian Government Services Australia for more information.

 

Last updated: 09/04/2020

Will interest rates be suspended on credit cards?

Banks and financial institutions may suspend credit card interest rates for a period as opposed to changing the interest rates. We recommend you keep in touch with your financial institution as the situation continues to unfold.

Last updated: 24/03/2020

I just lost my job. Can I apply for a credit card?

Whether or not you can successfully apply for a credit card will depend on the lender. When you apply for a credit card, a lender will assess whether or not you would be able to make your repayments. If you don’t have a stable form of income, the lender may deny your application.

If you’re trying to take out a credit card to cover everyday expenses, there may be Australian Government assistance that provides financial support.

The Australian Government recently announced JobSeeker payments or eligible Australians. This payment helps full-time, part-time and some casual workers maintain an income if they’ve been let go or stood down[i]. Alternatively, the JobKeeper payment is a program designed to help businesses keep their staff.

Please visit the Australian Government Services Australia for more information.

[i] Business.gov.au. 2020

 

Last updated: 09/04/2020

Will interest rates decrease on my credit card?

While the Reserve Bank of Australia (RBA) slashed the official cash rate to 0.25% on 20 March 2020, it’s difficult to say for certain if interest rates will decrease on credit cards.

Lenders might introduce some measures to help support their customers, like pausing interest on credit cards for a period. However, these measures could vary between banks and may depend on your circumstances.

If you’re concerned about how you could manage your credit card repayments because of COVID-19, you should contact your lender immediately to discuss your options.

If you’d like to see how your credit card rate and fees compare to others, try our free credit card comparison service.

Last updated: 26/03/2020

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