Hang on, are credit card providers passing on RBA rate cuts?

Tom Watson

15 Jul 2019

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No, not really. 

That’s the simple answer according to new research from Mozo which has found that credit card providers have been making a healthy profit by not passing on rate cuts to their Australian customers. 

Mozo’s figures show that a failure to pass on 3.25% in official rate cuts over the past eight years has resulted in a profit of around $5.2 billion for credit card providers over that period. 

In fact, despite 14 rate cuts from the Reserve Bank Board since 2011 totalling 3.75%, the average credit card interest rate has actually increased by 2.90% compared to the official cash rate. 

“With a staggering $31 billion worth of balances accruing interest across the country, many credit card customers could do with some interest rate relief,” said Mozo Director, Kirsty Lamont.

“Although home loan customers have benefited significantly from the official cuts, credit cards rates have remained stubbornly high.”

RELATED: RBA reveals fee gouging on tap and go payments continues to skyrocket

While not all lenders pass on RBA rate cuts to their home loan and deposit accounts in full, many do adjust their rates, at least in some part, to reflect changes in the official cash rate. 

For example, Mozo has recorded a number of home loan rate cuts from mortgage lenders since the RBA’s June rate cut from 1.50% to 1.25%.          

However, since the last month’s cut, only a handful of credit card providers have reduced their credit card interest rates, with the Mozo database showing that Auswide Bank and P&N Bank were two of a small number of banks to pass on the official interest rate cut by 0.25 and 0.18 basis points respectively. 

“With two providers taking the knife to their credit card interest rates, it begs the question - why can’t the rest do the same and pass on the official cut?” said Lamont. 

“Surprisingly, we have also seen some card providers hiking rates this year with Westpac and St George group pushing through 25 basis point increases across their card portfolios.” 

So what can Australian credit card users sick of high interest rates do?

According to Lamont, one of the best options for Aussies carrying credit card debt is to make the switch to a card with a lower interest rate (if possible) which could save them a bundle in interest. 

“With the RBA eyeing another cut this week, pressure is likely to build on credit card providers to pass on some of any official cut and give their customers some interest rate relief,” Lamont says. 

Ready to compare low rate credit cards today? Get started with some of the great offers below, or head over to Mozo’s low interest credit card hub to compare even more cards yourself. 

Compare credit cards

Rates updated daily. Advertiser disclosure.

  • Apply By 31 October 2021

    Bendigo Bank Low Rate Credit Card

    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)

    0% p.a. for 12 months then 11.99% p.a.

    $45

    0% p.a. on purchases for up to 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for up to 12 months. Low annual fee of $45 and no fees for additional cardholders.

    • 0% p.a. for 12 months then 11.99% p.a.

    • 0% p.a. for 12 months

    • 0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)

    • 13.99% p.a.

    • 55

    • 3.00%

    • $45

    • $15.00

    • 0.50%, Min $3.25

    Read our Mozo Review to learn more about the Low Rate Credit Card

    Details Close

  • Bankwest Breeze Mastercard

    0% p.a. for 15 months and then 9.90% p.a.

    0% p.a. for 15 months then 9.90% p.a.

    $49 $0 in the first year

    Enjoy 0% p.a on balance transfers for 15 months then 9.90% thereafter. No annual fee for the first year. Limited time only. Other fees, T&Cs apply. New Breeze Mastercard customers only.

    • 0% p.a. for 15 months then 9.90% p.a.

    • 0% p.a. for 15 months

    • 0% p.a. for 15 months and then 9.90% p.a.

    • 21.99% p.a.

    • 55

    • 0.0

    • 2.95%

    • $49 $0 in the first year

    • $25.00

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Breeze Mastercard

    Details Close

  • Great Southern Bank Low Rate Credit Card

    0% p.a. for 25 months and then 21.74% p.a.

    11.99% p.a.

    $49 $0 in the first year

    0% balance transfer rate for 25 months and up to 55 interest free days. No annual fee for the first year and $49 after. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^

    • 11.99% p.a.

    • -

    • 0% p.a. for 25 months and then 21.74% p.a.

    • 21.74% p.a.

    • 55

    • 0.0

    • 3.40%

    • $49 $0 in the first year

    • $12.50

    • 2.00%, Min $3.50

    Read our Mozo Review to learn more about the Low Rate Credit Card

    Details Close

  • MoneyMe Freestyle Virtual Mastercard

    No current offer

    16.99% p.a.

    $209 $0 - $149 based on credit limit, $5/month for balances over $20.

    Use your virtual card instantly once approved (typically within 60 minutes). Features include Tap n Pay with up to 55 days interest-free, transfer money to any bank account and exclusive access to MoneyMe perks. $0 annual fee for lower limits. Must be employed with decent credit history.

    • 16.99% p.a.

    • -

    • No current offer

    • 16.99% p.a.

    • 55

    • 2.99%

    • $209 $0 - $149 based on credit limit, $5/month for balances over $20.

    • $15.00

    Read our Mozo Review to learn more about the Freestyle Virtual Mastercard

    Details Close

  • Apply By 10 October 2021

    humm90 Mastercard

    No current offer

    23.99% p.a.

    $99

    With up to 110 days interest free on your spending, this card is pretty unique in the market, and great for managing your daily spend. Plus, no foreign transaction fees overseas or online.

    • 23.99% p.a.

    • -

    • No current offer

    • 25.99% p.a.

    • 110

    • 0%

    • $99

    • $35.00

    • 3%, min $3

    Read our Mozo Review to learn more about the Mastercard

    Details Close

^See information about the Mozo Experts Choice Credit cards Awards