HomeMedia & ResourcesMedia ReleasesShopping around on credit cards is the antidote to high interest rates

Shopping around on credit cards is the antidote to high interest rates

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The Customer Owned Banking Association (COBA) welcomes new debate about credit card interest rates and the benefit to consumers of shopping around.

Our top financial regulators have added their voices to the campaign encouraging consumers to shop around to get the best possible deal.

RBA Governor Philip Lowe and APRA Chair Wayne Byres appeared at a Senate inquiry last week.

Dr Lowe noted: “In the Australian financial system there are actually some very well-priced products for consumers, and one of the problems we have is that people don't take them up. So I encourage people to shop around.”

Mr Byres noted: “Perhaps the bigger issue … is that many banks that have high rate interest rates also have relatively low rate ones. As with the governor, I remain puzzled as to why more people don't take those up. They are there.” 

These comments follow in the wake of March RBA figures which reported national credit card debt at $41.5 billion, with $26.9 billion accruing interest.

CEO of COBA, Michael Lawrence, said customers who regularly reviewed their credit card arrangements were in a good position to seize better deals. 

“Card holders can always start the process by considering a number of key questions: ‘Has my spending behaviour changed? Do I have visibility of all costs? When was the last time I assessed payments?’

“Clear awareness of your current and future needs will help you make an informed decision when faced with a variety of products.”

CANSTAR’s recently released 2020 Credit Card Star Ratings highlighted the performance of customer owned banking institutions in offering cards with low fees and/or low interest rates.

Category

Outcome

Low Fee (for consumers seeking a credit card with low ongoing fees and who may be looking to access some  premium card facilities)

COBA members represented 8 of the 13 institutions  with 5 star ratings.

Low Rate (for consumers seeking a credit card with a low  interest rate and flexible repayment conditions)

COBA members represented 10 of the 14 institutions  with 5 star ratings

CANSTAR assessed 50 credit card providers and rated 195 credit cards. Major banks failed to achieve 5 star ratings for their products in the ‘Low Fee’ and ‘Low Rate’ categories.

“Customer owned banking institutions work hard to offer competitive products which are a good fit for their customers,” said Mr Lawrence.

“While they are profit making, COBA members aren’t chasing profit to please shareholders. They invest back into better products and services which retain customers for the long-term.”

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Media Contacts

Ashley Penny
Corporate Affairs Manager
P: +61 2 8035 8444
M: +61 431 932 950
Email Ashleycontact-arrow

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