When was the last time you really took notice of the interest rate you’re paying on your credit card? Has your rate gone down in the past 12 months? Not likely. Despite the official cash rate resting at just 2.5 percent, the average credit card interest rate has climbed from 17.07 percent to 17.09 percent in the same period according to our research.
There are now more cards on the market than a year ago – up from 180 – 188 – so there is plenty of choice out in the market. The cheapest interest rate is 8.99% and the most expensive is a whopping 23.5 percent.
Only one in four card providers have passed on any of the RBA’s cuts over the past year. Why? Steven Munchenberg, the Australian Bankers Association chief executive says its because of the risky nature of credit card debt. See here for full article by Sophie Elsworth.
With the peak credit card spending season (AKA Christmas) just around the corner, now is a good time to shop around and switch to a lower rate card. If you don’t pay off your balance in full each month, ditch high interest rewards cards as you’ll spend more in fees and interest than any rewards.