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BNZ offers borrowers incentive to pay off more than the minimum monthly credit card repayment

Personal Finance
BNZ offers borrowers incentive to pay off more than the minimum monthly credit card repayment

BNZ says it's incentivising credit card borrowers to pay off more than the minimum amount required each month by giving them the chance to have the bank match up to $2,000 of debt repayment.

BNZ is launching what it calls "Mission Zero," which the bank says will aim to help reduce the amount of money borrowers pay in credit card interest. In promoting the offer the bank says; "Getting rid of your credit card debt and never paying credit card interest again is one of the best financial moves you can make."

The major banks are competing fiercely in the credit card market through the likes of 0% balance transfer interest rate offers. BNZ is among those offering a 0% balance transfer rate for 12 months on balances transferred from a non-BNZ credit or store card to a BNZ credit card. Borrowers must, however, have their income paid into a BNZ transaction account.

And, as an incentive to work towards a $0 balance, if borrowers pay off more than the minimum repayment each month (until January 2016) they'll go into a draw to "win one of five chances" to have up to $2,000 of their repayment matched by the bank.

"So, if you paid $500 off your credit card that month, we could match it with another payment of $500 to your card," BNZ says.

"The programme will also incorporate advice and tips from BNZ experts, behavioural psychologists, financial advisors and people like you about smart ways to manage spending and credit card use."

"New Zealanders owe close to $6.5 billion on credit cards, and nearly two-thirds of that debt incurs interest at an average rate of 18.95% - 20.95% per annum," BNZ adds.

The BNZ offer comes with regulatory change afoot. As reported by interest.co.nz last November, the Government is seeking feedback on incoming consumer credit regulations that will prescribe both the cost of borrowing details lenders must make publicly available, and what goes in a minimum repayment warning on credit card statements.

And see interest.co.nz's warning on credit card minimum payment amounts here.

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