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

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 - last updated 21 May 2022

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • Apply By 31 Jul 2022
    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases and 0% p.a. on balance transfers for up to 20 months from account opening (Reverts to 11.99% p.a). A balance transfer fee of 2% applies to the balance transferred. Low annual fee of $45.

    Purchase rate
    0% p.a. for 20 months then 11.99% p.a.
    Balance transfer rate
    0% p.a. for 20 months and then 11.99% p.a. (2.00% balance transfer fee)
    Annual fee
    $45
    Rewards program
    -
    Details
  • Apply By 30 Jun 2022
    Westpac Low Rate - Cashback Offer

    Enjoy a super low rate of 13.74% with 55 days interest free plus up to $400 cashback - $100 cashback for each month you spend $1,000 or more on eligible purchases in the first 4 months from card approval. New Cards only. T&C's and exclusions apply.

    Purchase rate
    13.74% p.a.
    Balance transfer rate
    6.99% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    Annual fee
    $59
    Rewards program
    -
    Details
  • Apply By 30 Jun 2022
    St.George Vertigo - Balance Transfer Offer

    0% p.a. for 32 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply.

    Purchase rate
    13.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.49% p.a.
    Annual fee
    $55 $0 in the first year
    Rewards program
    -
    Details
  • NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 32 months, plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Purchase rate
    12.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
    Annual fee
    $59 $0 in the first year
    Rewards program
    -
    Details
  • Apply By 30 Jun 2022
    Bank of Melbourne Vertigo - Balance Transfer Offer

    0% p.a. for 32 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply.

    Purchase rate
    13.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.49% p.a.
    Annual fee
    $55 $0 in the first year
    Rewards program
    -
    Details

^See information about the Mozo Experts Choice Credit Card Awards

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