Consumer groups praise NAB for Aussie credit reforms

Consumer groups in Australia have praised the NAB for its recent reforms, which it is hoped will save credit card holders hundreds of dollars every year.

Consumer groups have praised the National Australia Bank (NAB) for its credit card reforms, which could save customers hundreds of dollars each year.

The applause from various groups representing Aussie credit card holders comes after the bank recently announced new measures that will see any payments made reducing the balance attracting the highest interest rate first.

Christopher Zinn, spokesman for consumer association Choice, told ABC News that the policy could mean other credit card companies soon start following in the NAB's footsteps.

He says: "If all banks followed suit, that could mean $225 million in fees and interest actually remaining in consumers' wallets and not being spirited away to banks' vaults."

Despite the changes being beneficial to more than 1.5 million Oz credit cards holders, the changes are set to cost the NAB approximately $4 million each year.

The bank is the first major Australian financial institution to overhaul the way balance transfers are managed on credit card accounts.

By Mark Hornby