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 - last updated November 28, 2020
Westpac Low Rate
Westpac Low RateDetails
ME frank Credit Card
ME frank Credit CardDetails
Defence Bank Foundation Credit Card
Defence Bank Foundation Credit CardDetails
CUA Low Rate Credit Card
CUA Low Rate Credit CardDetails
^See information about the Mozo Experts Choice Credit Cards Awards
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