NAB credit card customers risk bad credit record

NAB is switching its credit card customers to Visa. Photo: Louise KennerleyNational Australia Bank credit card customers who do not update their direct debit arrangements when they are issued their new Visa credit card risk not only missing payments, but potentially damaging their credit records.
Nanjing Night Net

The warning comes as hundreds of thousands of NAB credit card customers are being switched from MasterCard to Visa.

With the advent of the comprehensive credit reporting regimen, more types of late payments of bills are recorded on credit records.  A poor credit record could make if harder or impossible to get a loan.

Late last year, NAB signed a 10-year exclusive deal with Visa effectively dumping MasterCard. All customers have been notified of the change.

It started issuing Visa credit cards to its MasterCard customers in July. t is expected to be another 12 months until the switch-over is complete.

There is no change for NAB debit cardholders as NAB debit cards are already provided by Visa.

A Money reader recently received a letter from NAB saying that she is to be issued with a Visa credit card. This was the first she heard of it.

The reader, who wishes not to be named, said her husband has direct debits on the MasterCard to pay the bills and is not impressed with having to change all the arrangements.

“It’s a very high-handed, unilateral decision in which their customers have had no say in whatsoever,” she says.

NAB maintains that customers who have a MasterCard credit card are being issued a like-for-like or better Visa credit card.

A NAB spokesperson said the bank is providing its customers with a changeover period of at least 60 days after they receive their new Visa credit card to update their direct debit details.

Also, some direct debits, such as those payments set up by NAB or from other bank accounts, will automatically be transferred to the new card.

Bessie Hassan, money expert at comparison site, Finder, says it is very important that NAB customers check their last credit card bill and identify all payments that are processed automatically and give the providers their new credit card details.

“If you forget to change your direct debits you could miss payments and subsequently damage your credit score if a direct debit remains unpaid for too long,” she says.

A damaged credit score is more likely with a missed regular payment, such as for telecommunications plans, which many people pay automatically with their credit cards, she says.

Payments on home loans, personal loans and on credit cards themselves are usually not allowed to be made with credit cards, she says.

NAB says the deal with Visa will result in a “full range of card features and improved banking and payment experiences”.

For example, as a consequence of the deal with Visa, the bank earlier this year released NAB Pay, which allows customers to make contactless payments using their smartphones.

Westpac and Commonwealth Banks say they have no plans to follow NAB in signing up their retail credit card customers with one credit card provider.

ANZ was contacted but did not respond by deadline.

This story Administrator ready to work first appeared on Nanjing Night Net.