ME Credit Cards

ME Bank Credit Cards

Could that possibly be a ME Bank credit card? At ME Bank, they believe that every Australian deserves to get the most out of their money. With more than twenty years in the industry, ME Bank now offers everything from home loans and bank accounts, to insurance and credit cards – but does it deliver on its promise?

Leaving aside ME Bank’s other financial offerings, there is ME Bank’s credit card. No, ME Bank doesn’t have heaps of credit cards like some of the big banks. It has one. But, that one card could indeed help Australians to get the most out of their money. How? Time to take a closer look.

ME Frank Credit Card

Unlike many other credit cards, the ME Frank Credit Card keeps it simple. In fact, ME Bank says Frank is “the first low rate credit card with nothing to hide”. So, with nothing to hide, what is it that Frank has to offer?

Low Rates

As we’ve seen, ME Bank is marketing the ME Frank Credit Card as a low rate card. With a super low purchase rate and cash advance rate, Frank most definitely is a low rate credit card. That means when cardholders make purchases (or withdraw cash) on their card, that balance will attract a much lower rate of interest than on a standard credit card.

Standard credit cards generally attract higher rates of interest, usually ranging between 17% p.a. and 23% p.a. Cardholders who retain a balance on those cards would have to pay much more in interest than they would on a low rate card, such as Frank.

With that in mind, what type of cardholder would suit a low rate credit card?

Retaining a Balance

Some cardholders retain a balance month-to-month. They may use their card to buy stuff, and they may pay some of their balance off each month. But, they don’t pay off the balance in full. This can be described as having a revolving balance. Money goes into the credit card, money comes out of the credit card, but a balance is always present.

For anyone who wants to save money on their credit card, keeping a revolving balance is not really recommended. Why? Cardholders who have a revolving balance can end up paying out significantly in interest. The balance that remains unpaid on that card can attract interest, which left unpaid, will keep on adding to the amount owed on the card.

For some cardholders, that can be a slippery slope - especially for those who are only making the minimum repayment each month. Instead of paying off the credit card, the debt keeps growing, with the cardholder paying out more and more in interest. Cardholders can spend years paying off their balance, while paying thousands in interest to their credit card provider.

There are various solutions to this problem.

• Transfer to a balance transfer card: The cardholder transfers their balance to a balance transfer card to pay a much lower rate of interest for an introductory period. The cardholder then works to pay off the transferred balance before the intro period ends.
• Pay off the balance: Cardholders who have the money to pay off their balance – but who didn’t know the value of doing so – can simply pay it off to save loads on interest.
• Transfer to a low rate card: Some cardholders are not keen on balance transfer cards, or cannot get approval for them. For them, an alternative option is a low rate credit card. By transferring to a low rate card, cardholders will pay less in interest on their balance. Hopefully, they will then work on paying down the balance to pay less in interest overall.

By choosing the last option - transferring to a low rate card, such as the ME Bank Frank Credit Card - cardholders could save on interest, both now, and if they happen to have a balance left unpaid in the future.

Large Balance

This is a similar kind of problem to having a revolving balance. Cardholders who have a large balance on their credit card may not be retaining a balance on purpose. They may simply have racked up debt on their credit card, and are now having trouble paying it off.

Again though, the solutions are pretty similar. Transferring to a balance transfer card can be a good option. When considering this, cardholders should find out what the rate reverts to at the end of the introductory period. Some balance transfer cards have incredibly high revert rates, leaving cardholders in a worse state than they were before the switch.

By transferring to a low rate card, cardholders can enjoy one low rate of interest. They can then work on paying off their credit card debt without worrying about tricky balance transfer introductory offers.

New to Credit

When we are new to something, it’s easy to mess up. When we don’t really know what we’re doing, it can be easy to end up in trouble. This can often be the case with credit cards. For someone who doesn’t know how to correctly deal with credit, getting their first credit card can be somewhat heady.

It’s oh-so easy to overspend on a first credit card, buying stuff simply because there is credit available to do so. Before you know it, you have a large credit card debt that you can’t pay off. That debt will keep on accruing interest until it is paid off. Not so good, when you have a credit card with a high purchase rate.

When applying for your first credit card, it can be a good idea to choose a low rate option. Then, if you happen to mess up, your balance will attract a much lower rate of interest. This should make it easier to pay off than if it were attracting a higher rate of interest.

With a low rate credit card, even if you don’t rack up a high balance, it still provides a relatively safer way to learn about credit cards. From there, cardholders can choose to stick with a low rate option once they’ve got the hang of dealing with credit – or they can try out other cards with perhaps more features.

Money Saver

Some cardholders simply like saving money. They want a card with the lowest possible purchase rate because they want to be as smart as possible with their money. For them, the ME Bank Frank Credit Card could be the perfect option. With a low purchase rate, Frank can provide a perfect money saver.

No Annual Fee

Not only does the ME Bank Frank Credit Card have a low purchase rate, it also happens to charge no annual fee. Australians pay millions each year in unnecessary credit card fees, such as the annual fee. Why is it unnecessary? Because there are credit cards out there – like Frank – that charge no annual fee at all.

Credit card providers charge an annual fee on their credit cards for a number of reasons. Firstly, card providers are providing a service. They are provider cardholders with access to credit. Just like with many other financial products, such as personal loans, providers will charge a fee for the service they are providing.

Secondly, card providers are providing the cardholder with certain features. This could include personal concierge services, insurances, rewards programs, and so much more. But in general, they are not providing these features for free. Features are used to entice customers - but cardholders still have to pay for them. For cardholders who want those features, the key is to make sure they get more back from the features on offer, than they pay out in annual fees.

So then, who would suit a credit card with no annual fee?

Seekers of Simple

ME Bank clearly offers up Frank as a simple, no frills card. For some cardholders, this is perfect. They don’t want any introductory offers to trip them up. They don’t need any tricky rewards programs they don’t understand. They don’t require features such as insurances and warranties, or personal concierge services.

All these cardholders want is access to credit, in the cheapest possible way. Combining a low purchase rate with no annual fee, Frank embodies this ideal. There are no fancy features, but some cardholders simply don’t need them.

Money Savers

Yep, this one again. Just as some cardholders want to save money on interest with low rate cards, some also want to save money on fees with a no annual fee card. Considering some credit cards can charge fees that range from a few hundred dollars to over a thousand, no annual fee cards can help save quite a lot of money indeed.

Saving for an Emergency

Not everyone needs a credit card for everyday use. But, it can be handy to have one, just in case. A no annual fee card such as the ME Bank Frank Credit Card can be perfect for emergencies only. Cardholders don’t pay to keep Frank in their wallet, but it’s there in case of an emergency.

Perhaps the dog ate rocks again and needs expensive surgery. Maybe the head gasket went on the car and it needs an entire rebuild on the engine. An emergency credit card can help cover those unforeseen costs, providing access to credit exactly when it’s needed.

Pretty impressive indeed. No, Frank doesn’t have a rewards program. Nope, Frank doesn’t offer any perks or features. But, Frank is easy to understand and can help save cardholders money on interest and annual fees. This type of card will not be for everyone, but for some cardholders, it can be extremely attractive.

And ME Bank?

Okay, everyone knows about the big banks. They’ve been around longer than we have – and they are everywhere. This is exactly why some people choose the big banks over relatively unknown options, such as ME Bank. But is this a good idea?

The big banks can be a great option for some people. They can offer a huge range of products and services, and they can give some people peace of mind that they are banking with a big bank. But, smaller can be better for some folks.

ME Bank started life in 1994 as Super Member Home Loans (SMHL) by Australia's Industry Super Funds. In 1999, SMHL became Members Equity Bank, and received its banking license from APRA in 2001. But while it may be a bank, it is still owned by industry super funds. Thirty of them, to be exact. These include AustralianSuper, HESTA, HOSTPLUS and Cbus.

Having gained its Australian Banking License, ME Bank is officially an Authorised Deposit-taking Institution. That means it has to abide by all the same rules – and is covered by all the same safeguards – as bigger, better known banks, like the Big Four. Surely, ME Bank must be doing something right. Perhaps it’s time for a closer look at Frank?