Virgin flies back into banking with three new products
Virgin Money is taking a second stab at the Aussie banking market, introducing two new credit cards and an online savings account, partnering with Citibank.
Virgin Money's first foray into the Australian banking world several years ago was initially a success, but Virgin Money ended up selling its credit card portfolio to Westpac a few years later and stopped marketing home loans to new customers.
Only its superannuation product survived and just last year it began offering car insurance.
This is the first time Virgin Money has offered an online savings account. The Virgin Saver is starting with a big bang, paying an introductory rate of 6.75%pa. This will revert to 5.35%pa after four months. Like most online savers no ongoing fees apply.
As for the two credit cards, one is a no-frills card and the other has a rewards program. The No Annual Fee card comes with up to 44 days interest free and charges a rate of 16.95%pa on purchases and 20.99% on cash advances.
The second card - the Virgin Flyer - lets you earn Velocity Points which you can use towards flights. Customers can earn one point for every dollar up to $1500 a month, then one point for every $2. The other bonus is that customers who purchase a Virgin Blue flight with their card get a second seat for free. This is a maximum of four times a year.
Customers who apply for a card before September 30 and use it by October 15 can get a free flight! The annual fee is $99, the interest rate of 20.99%pa applies to both purchases and cash advances, and you get up to 44 days interest free. A catch is you need to earn at least $50,000 a year to be eligible for the Virgin Flyer.
Money verdict
The Virgin Saver intro rate is the highest currently on offer and the standard rate of 5.35%pa is not to be sneezed at either.
The No Annual Fee Card is similar to Virgin Money's original proposition, but Datamonitor's Harry Senlitonga points out while its predecessor offered one of the lowest rates on the market this new option is not as competitive.
The Virgin Flyer card would certainly appeal to regular Virgin Blue flyers but the rate is hefty so make sure you can pay off your balance in full or you could diminish the value of the rewards.
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