Some big credit card issuers, whose brands are usually associated with the premium end of the market, are launching new low-rate products or cutting rates.
American Express has lowered the interest rate on its Low Rate Credit Card from 11.99 per cent to 8.99 per cent. The card has no annual fee and has up to 55 days interest-free.
“Australians have been paying high rates on credit cards for years but the market is slowly shifting,” says Sally Tindall, RateCity.com.au money editor.
“Low-rate cards are the new black.”
Last year ANZ dropped rates, while Westpac and Commonwealth Bank have both put new low-rate cards into the market.
According to RateCity.com.au, the Amex card has the lowest rate in the market, along with Community First Credit Union’s Low Rate Visa and McGrath Pink Visa, and Easy Street Credit Union’s Easy Low Rate Visa. Easy Street and Community First both have $40 annual fees.
Other low-rate leaders are Bank Australia, which charges interest of 9.39 per cent on its Low Rate Visa, and G&C Mutual Bank, which charges 9.49 per cent on its Low Rate Visa.
Among the big banks, low rate options include Commonwealth Bank’s Essentials, which has a rate of 9.9 per cent, Westpac’s Lite Card (9.9 per cent), ANZ’s Low Rate Platinum 911.49 per cent) and NAB’s Low Rate Card (13.99 per cent).
Mozo.com.au points out that low rate cards are relatively basic products. CBA’s Essentials card has a $3000 credit limit, no balance transfer and no cash advance facility. The $5 a month fee is reduced to $2 if cardholders sign up to a repayment program.
Aside from low-rate cards, Mozo says the best offers currently in the market include Citibank’s offer of a zero-rate balance transfer for 26 months on its Platinum card (there is a 2.5 per cent balance transfer fee), and Virgin Money’s offer of a zero per cent purchase rate for 14 months on its Virgin Money Flyer card.
Bonus point offers include 150,000 points for signing up to Citi’s Prestige card and 120,000 points on its Signature card.
Amex is offering 100,000 points to new Explorer and Qantas Ultimate cardholders, and NAB is offering 100,000 points on its Rewards Signature card.