1 in 3 Aussies don’t know their credit card interest rate

If we were to ask you for your phone number, you could tell us in three seconds. But what about if we wanted to know your credit card interest rate?

According to new research from Defence Bank, one in three Aussies don’t know their credit card rate. Of those Aussies, four out of five didn’t realise their interest rate was above 10%, while some owed a card with a rate above 20%. 

“It’s time to break the cycle of paying unnecessarily high credit card interest rates. Australian consumers need to stop paying 20% for the convenience of a basic credit card, when genuine low-rate options exist for half the cost,” said Defence Bank chief executive officer, David Marshall. 

Concerningly, more than half (60%) of respondents admitted they don’t pay much attention to the rate on their card, while one in four carry a balance sometimes throughout the year. 

The data also found that Aussies are losing faith in rewards credit cards, with one in two believing the rewards programs are generally not good value for money. 

“We see from these results that Australians are frustrated by the rates they’re paying and the bells and whistles they either can’t use or don’t need,” says Marshall.

Christmas debt still a problem for Aussies

Aside from forgetting their credit card interest rate, the survey also revealed that one in five Aussies find it hard to pay their credit card balance after the Christmas period. 

Given the year we’ve just had, it’s not surprising that many households had to rely on their plastic to get them through the festive season. But by not taking action against your Christmas debt now, you could find yourself racking up a hefty bill down the line. 

Getting on top of your credit card debt doesn’t have to feel impossible, in fact, check out our top three tips to paying down debt:

• Pay more than the minimum amount: Depending on the type of credit card you have, your minimum payment might range between $30 to $70 a month. But if you’ve got a big balance to pay off, not only could you spend months trying to clear your debt but also paying more than necessary in interest. 
• Try selling stuff online: Rummage through your house to find items you no longer need or use, like an old pair of sneakers or cabinet. There’s not much you can’t sell online, so any unused item is fair game! Then once you’ve made a pretty penny, put the money you’ve made towards your debt. 
• Consider a balance transfer credit card: If both your credit card balance and interest rate are too big to manage, a balance transfer credit card can help you get out of a sticky situation. This is a card that features 0% interest for a period of time, helping you pay down your balance interest-free.

You can compare balance transfer credit cards by checking out Mozo’s credit card comparison tool or by getting started with some offers below.