Diners Club Lets Borrowers Fly From Debt
Sydney Morning Herald
Tuesday November 21, 2000
Diners Club has entered the home lending market with a loan that tempts borrowers to increase their debt by giving them frequent flyer points every time they add $100 to their mortgage.
Its Club Preferred Mortgage is a revolving credit package secured by property, offering 20,000 reward points with Ansett Australia when customers sign up, and further points on a monthly basis.
Borrowers receive 1.5 bonus points for every $100 outstanding on their line of credit every month.
Under the deal, a debt of $125,000 will attract more than 22,000 points a year, the equivalent of a flight from Sydney to Melbourne or Coolangatta.
While there are other home loan products on the market that accrue frequent flyer points in a similar way, this is the first to be offered by a charge and credit card company such as Diners Club.
The standard variable interest rate on the Club Preferred Mortgage is 8.05 per cent and it includes a redraw facility.
Diners Club's managing director, Mr Bryan Ericson, said: ``This is a home loan product with frequent flyer points, a high level of personal service and no establishment fees."
Its rival, American Express, said it had no immediate plans to offer home loans, although a range of financial services is offered by the company in the United States and Japan.
Diners Club said its new home loan was aimed at borrowers who wished to use their home mortgage to facilitate additional investments.
Diners Club, which has 400,000 card holders in Australia, and a 16 per cent share of the credit and charge card market, said the loan facility would be offered to its members before being promoted more widely.
Meanwhile, Australia's first multi-bank retailer, Money Street, was launched yesterday. Customers will be able to take up loans offered by many major lenders including Commonwealth, Westpac, ANZ, St George, Citibank, RAMS and Macquarie Bank at one location.
The first outlet will open in Darlinghurst later this month.
© 2000 Sydney Morning Herald
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