How do you recognise a very basic credit card which will nevertheless be functional, easy to manage, and will cost you little or even nothing? When a card like the Westpac 55 Day Credit Card is so short of fancy (and often overpriced) features that it becomes necessary to promote it with a reminder about the 55 days of credit allowed every month.
However, Westpac could just as accurately have called it the ‘Interest-free Purchases Credit Card’, and with this Online Exclusive Offer the already lengthy special offer for months of interest-free purchases becomes even longer.
It could also be called the ‘Potentially No Annual Fee Credit Card’ since there’s a way to avoid the already low annual fee every year.
What’s so special about ‘up to 55 days interest free’?
The monthly interest-free days attached to a credit card are the days that are allowed to elapse between a purchase transaction and the date the cardholder has to pay for the purchase in order to avoid incurring interest charges. In this case, purchases made on the first day of the statement cycle won’t be due for payment until 55 days later, while purchases made on the last day of the cycle will start incurring interest around 25 days later unless full payment of the account closing balance is made.
All credit cards have a number of regular, interest-free days, otherwise they would be not a credit card but a debit card. But before you dismiss these 55 interest-free days as nothing more than you would expect, take a look at the reality. Not every card comes with this many interest-free days. Many cards come with only 44 interest-free days.
Don’t discount the value of the extra 11 days
The 11 extra days of credit each month (when compared with a 44-day card) add up to a sizeable 132 days each year. If your average monthly closing purchase balance is, say, $2,000, that’s an extra 132 days that your $2,000 can stay in the bank, earning interest or reducing your mortgage balance in an offset account. The earning or saving doesn’t amount to much in a low-interest environment (about $22 in a 3 percent p.a. savings account or $29 in a 4 percent p.a. mortgage offset account) but it’s still better in your pocket than the bank’s, and interest rates will inevitably rise one day.
Higher-fee cards often have fewer interest-free days
Many much more expensive credit cards, including Westpac’s own prestige Altitude range, actually come with a lower number of interest-free days. Westpac Altitude cards have ‘up to 45 days’ interest free. So Westpac is probably justified in putting the 55 interest-free days at the forefront of this low-fee card’s features.
Introductory offer: no interest payable on purchases for 13 months
If you’re the kind of person who always pays off their purchases balance on the monthly due date, in order to avoid high interest charges, you will need to change your behaviour temporarily in order to take advantage of this offer. Instead of paying off your balance each month, you can allow it to accumulate for the first 13 months of holding the card, without incurring any interest charges.
This Online Exclusive Offer adds an extra four months to the standard offer for new cardholders.
It will require a certain amount of discipline to avoid running up a debt you can’t repay after 13 months, however. The best approach would be to put into your savings account an amount equivalent to each month’s purchases so that you have the sum available for full repayment after 13 months, plus a little interest income as a bonus.
Don’t choose this card for the ongoing interest rates
Strive to repay your accumulated purchases balance in full at the end of this interest-free period, because the revert rate (the ongoing purchases interest rate) is a seriously unpleasant 19.84 percent p.a. The cash advance interest rate is 21.29 percent p.a. Although these are not unusual rates in the world of credit cards, there are cards available which have much lower rates.
Choosing a credit card for its low interest rates is in fact a bad idea. The best way to use a credit card is to take full advantage of the interest-free days each month, pay off the full balance at each due date, and never pay a cent in interest. But if you think it’s likely that you will fail to do this on a regular basis after the 13 interest-free months have expired, don’t choose this card. Pick one with a lower purchase interest rate, like its stablemate the Westpac Low Rate Credit Card.
Use the SmartPlan repayment option after the introductory offer expires
Westpac has introduced a SmartPlan repayment option for large purchases. For individual purchases over $500 (e.g. a dishwasher, laptop, international airfare), opt into SmartPlan and commit to monthly repayments which will see your balance cleared in full by the end of an agreed period.
In return, Westpac will let you use your card for all your other purchases and still enjoy up to 55 days interest free each month. And, depending on the amount of your large purchase, you won’t be charged any interest on the large purchase balance for the first three, six or nine months. There’s an upfront credit establishment fee to pay, equivalent to 1 percent (for three-month plans), 2 percent (for six-month plans) or 4 percent (for 12-month plans) of the purchase amount.
For longer SmartPlan repayment terms, it may be possible to arrange a lower interest rate than the standard ongoing purchases interest rate
You can set up as many as eight separate concurrent SmartPlans using online banking or the mobile app. Even better, choose Autopay so that you don’t miss any repayments.
Low annual fee – or no fee at all
While the ongoing annual fee for this card is $30 (with no extra charge for a supplementary card), there’s no reason why you should ever have to pay it.
The fee is automatically waived in the first year, which makes the card very attractive if you want to try it for size. You’ll also pay no fee in any subsequent year in which you make $5,000 of purchases with the card. Given that you’ll need a minimum income of $15,000 to qualify for the card, and that the minimum credit limit is $500, it shouldn’t be too hard to spend an average of $417 per month in order to avoid the annual fee.
No stinting on technology
Although this is a basic, low-fee card, the inbuilt technology is just as up-to-date as it is for Westpac’s expensive prestige cards:
No skimping on security
The card’s state-of-the-art security features go way beyond the embedded microchip:
Compare other basic cards
If you’re in the market for a straightforward card like this one, essentially free to keep in your wallet, and unencumbered by expensive rewards points programs or complimentary insurance, there’s plenty of choices. Take a look at these other cards before you decide:
Or, if you’re happy to receive complimentary benefits and loyalty points which will cost you nothing:
However, you might choose the Westpac 55 Day Credit Card because . . .
Does some of this sound like you? It costs nothing to give it a try, and it could suit you for many years to come.
|Interest rate||Period||Fee||Limit||Revert rate|
|Purchases||0% p.a.||13 months||N/A||N/A||19.84% p.a.|
|Cash advances||1.77%||21.29% p.a.|