Credit card issuers make big profits by not passing RBA rate cuts
When the RBA announces it will be reducing the official cash rate, many Aussies are left anxiously waiting for their home loan lender to make a move and follow suit. This is not surprising given that mortgages are usually the highest expense for any household.
But what about the rates on our credit cards?
New Mozo research has found that credit card providers have profited a whopping $6.4 billion by failing to pass on 4.40% in cash rate cuts over the past eight years.
“The failure to provide rate relief to credit card customers after the RBA cuts the official cash rate has become a bad habit and a multi billion dollar business,” said Mozo Director, Kirsty Lamont.
“At a time when credit card providers are faced with increasing competition from Buy Now, Pay Later services, something as simple as providing interest rate relief could be the difference between retaining customers or not.”
Mozo’s data shows that the average credit card interest rate is also 164 times higher than the cash rate at 16.39%. However, while $20 billion dollars worth of balances are continuing to accrue interest across the country, Aussies have been making the effort to reduce their credit card debt, as balances have fallen by an impressive 46% since 2012.
The credit card market: the lone wolf and the lowest offer
According to the Mozo database, Auswide Bank was the only credit card provider who made a move following the recent RBA rate cut, slicing 15 basis points off its credit card.
“With just one provider 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 rate,” says Lamont.
The lowest purchase rate in the Mozo database belongs to Greater Bank and its Greater Visa Credit Card, which currently boasts a purchase rate of a rock bottom 5.95% - however this rate is only available until 1 April 2021.
“If your credit card provider hasn’t cut your interest rates and you're carrying a balance forward it’s worth comparing interest rates and switching to the best rate you can find,” Lamont concluded.
So, if you’re ready to start comparing some of the current credit card offers on the market, head on over to our credit card comparison tool or get started with some low rate offers below.
Compare low rate credit cards - rates updated daily
- Apply By 30 June 2021
Bendigo Bank Low Rate Credit Card
0% p.a. balance transfer for 24 months (Reverts to 11.99% p.a). Low annual fee of $45 and no fees for additional cardholders.
Purchase rate
Balance transfer rate
Annual fee
11.99% p.a.0% p.a. for 24 months and then 11.99% p.a. (2.00% balance transfer fee)$45Low Rate Credit Card
0% p.a. balance transfer for 24 months (Reverts to 11.99% p.a). Low annual fee of $45 and no fees for additional cardholders.
- Purchase rate
- 11.99% p.a.
- Intro purchase rate
- -
- Balance transfer rate
- 0% p.a. for 24 months and then 11.99% p.a. (2.00% balance transfer fee)
- Cash advance
- 13.99% p.a.
- Interest free days on purchases
- 55
- Intro fee
- -
- Foreign exchange margin
- 3.00%
- Annual card fee
- $45
- Late payment fee
- $15.00
- Cash advance fee
- 0.50%, Min $3.25
Read our Mozo Review to learn more about the Low Rate Credit Card
Defence Bank Foundation Credit Card
Defence Bank Low Rate Credit Card offers a 3.99% p.a. 6 month introductory rate on balance transfers, purchases and cash advances. Up to 55 days interest free on purchases.
Purchase rate
Balance transfer rate
Annual fee
3.99% p.a. for 6 months then 8.99% p.a.3.99% p.a. for 6 months and then 8.99% p.a.$45Foundation Credit Card
Defence Bank Low Rate Credit Card offers a 3.99% p.a. 6 month introductory rate on balance transfers, purchases and cash advances. Up to 55 days interest free on purchases.
- Purchase rate
- 3.99% p.a. for 6 months then 8.99% p.a.
- Intro purchase rate
- 3.99% p.a. for 6 months
- Balance transfer rate
- 3.99% p.a. for 6 months and then 8.99% p.a.
- Cash advance
- 8.99% p.a.
- Interest free days on purchases
- 55
- Intro fee
- -
- Foreign exchange margin
- 3.00%
- Annual card fee
- $45
- Late payment fee
- $20.00
- Cash advance fee
- 4.1
Read our Mozo Review to learn more about the Foundation Credit Card
St.George Vertigo
0% p.a. for 28 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends September 28th 2021.
Purchase rate
Balance transfer rate
Annual fee
13.99% p.a.0% p.a. for 28 months and then 21.49% p.a.$55Vertigo
0% p.a. for 28 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends September 28th 2021.
- Purchase rate
- 13.99% p.a.
- Intro purchase rate
- -
- Balance transfer rate
- 0% p.a. for 28 months and then 21.49% p.a.
- Cash advance
- 21.49% p.a.
- Interest free days on purchases
- 55
- Intro fee
- -
- Foreign exchange margin
- 3.00%
- Annual card fee
- $55
- Late payment fee
- $15.00
- Cash advance fee
- 2%, Min $2.50
Read our Mozo Review to learn more about the Vertigo
- Apply By 7 September 2021
Westpac Low Rate
Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter.
Purchase rate
Balance transfer rate
Annual fee
13.74% p.a.0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)$59 $0 in the first yearLow Rate
Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter.
- Purchase rate
- 13.74% p.a.
- Intro purchase rate
- -
- Balance transfer rate
- 0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
- Cash advance
- 21.49% p.a.
- Interest free days on purchases
- 55
- Intro fee
- 0.0
- Foreign exchange margin
- 3.00%
- Annual card fee
- $59 $0 in the first year
- Late payment fee
- $15.00
- Cash advance fee
- 2%, Min $2.50, Max $150
Read our Mozo Review to learn more about the Low Rate
ING Orange One Low Rate Credit Card
With a low interest rate, no annual fee and, if per account, you meet the eligibility criteria, no ING International Transaction Fees when you shop overseas or online. Automatic repayments from eligible ING accounts.
Purchase rate
Balance transfer rate
Annual fee
11.99% p.a.No current offer$0Orange One Low Rate Credit Card
With a low interest rate, no annual fee and, if per account, you meet the eligibility criteria, no ING International Transaction Fees when you shop overseas or online. Automatic repayments from eligible ING accounts.
- Purchase rate
- 11.99% p.a.
- Intro purchase rate
- -
- Balance transfer rate
- No current offer
- Cash advance
- 11.99% p.a.
- Interest free days on purchases
- 45
- Intro fee
- -
- Foreign exchange margin
- 2.50%
- Annual card fee
- $0
- Late payment fee
- $20.00
- Cash advance fee
- 3%, Min $3.00
Read our Mozo Review to learn more about the Orange One Low Rate Credit Card
^See information about the Mozo Experts Choice Credit Cards Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.