Credit card users not given enough help, experts say
14 May 2020
While home loan and business owners have received extensive financial aid, it’s credit card customers who have pulled the short straw in the COVID-19 pandemic.
Over recent months, we’ve seen the rollout of financial assistance from banks and financial institutions but perhaps not enough focus on credit - at least that’s what some experts believe.
“Unsecured credit has been the poor cousin in all of this [pandemic],” said director of policy at the Consumer Action Law Centre, Katherine Temple. “A lot of [other banks] responses are kicking the can down the road.”
Deferring repayments, purchase rate reductions and lowering the minimum repayment amount for vulnerable customers are measures that have been put in place. However, there’s one area that may have been overlooked. Accruing interest.
RELATED: Four credit card tips for financially strapped times
According to J.D Power, 26% of Aussies are using their plastic to pay for household necessities. So, if you own a credit card with an interest rate over 20%, you may find yourself with some challenges once the deferral period ends: a stack of built up debt, higher repayments and a hefty interest bill to match.
According to Mozo Director, Kirsty Lamont, there are a few things Aussies can do now to prepare themselves for the future.
“It’s crucial that credit card holders familiarise themselves with smart ways to pay down their debt, so that when the time comes, they are fully equipped to do so,” says Lamont.
“One course of action might be to apply for a balance transfer credit card, which can wipe away debt without the interest.
“It’s important to prepare a realistic repayment plan, so you’re guaranteed to clear your balance before the 0% interest rate period ends. Otherwise, you could find yourself with a revert purchase rate much higher than what you initially started with.”
RELATED: Get on top of debt! 4 smart ways to pay off your credit card
If you’d like to find out how much you could save in interest by taking out a balance transfer credit card, check out some offers below or head on over to our comparison tool for more options.
And if you haven’t been keeping up with the latest COVID-19 developments, check out our coverage of all the credit card relief packages banks offer.
Compare balance transfer credit cards
Rates updated daily. Advertiser disclosure.
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Virgin Money Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 28 months and then 20.99% p.a.
20.74% p.a.
$129 $0 in the first year
Get in the air with a $129 Virgin Australia Gift Voucher each year. 0% p.a. for 28 months on balance transfers.
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20.74% p.a.
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-
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0% p.a. for 28 months and then 20.99% p.a.
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20.99% p.a.
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55
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0.0
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3.30%
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$129 $0 in the first year
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$30.00
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2.7%, Min $2.70
Read our Mozo Review to learn more about the Virgin Australia Velocity Flyer Card - Balance Transfer Offer
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Virgin Money Virgin Australia Velocity High Flyer Card
0% p.a. for 12 months and then 20.99% p.a.
20.74% p.a.
$289
Earn up to 100,000 bonus Velocity Points (minimum spend applies) plus snag a $129 Virgin Australia Gift Voucher and two free Virgin Australia domestic Lounge passes each year to kickstart your travel adventures.
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20.74% p.a.
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0% p.a. for 12 months and then 20.99% p.a.
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20.99% p.a.
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44
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3.30%
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$289
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$30.00
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2.7%, Min $2.70
Read our Mozo Review to learn more about the Virgin Australia Velocity High Flyer Card
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Westpac Low Rate
0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
13.74% p.a.
$59 $0 in the first year
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. New Cards only. Offer ends February 24th 2022. T&C's and exclusions apply.
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13.74% p.a.
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0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
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21.49% p.a.
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55
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0.0
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3.00%
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$59 $0 in the first year
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$15.00
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3%
Read our Mozo Review to learn more about the Low Rate
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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.
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0% p.a. for 15 months then 9.90% p.a.
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0% p.a. for 15 months
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0% p.a. for 15 months and then 9.90% p.a.
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21.99% p.a.
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55
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0.0
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2.95%
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$49 $0 in the first year
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$25.00
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2%, Min $4.00
Read our Mozo Review to learn more about the Breeze Mastercard
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