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
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Promoted
CUACUA Low Rate Credit Card
0% p.a. for 18 months and then 21.74% p.a.
11.99% p.a.
$49 $0 in the first year
0% balance transfer rate for 18 months and up to 55 interest free days. No annual fee for the first year and $49 after.
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11.99% p.a.
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0% p.a. for 18 months and then 21.74% p.a.
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21.74% p.a.
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55
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0.0
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3.40%
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$49 $0 in the first year
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$12.50
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2.00%, Min $3.50
Read our Mozo Review to learn more about the Low Rate Credit Card
Details Close
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Promoted
BankwestBankwest Breeze Mastercard
0% p.a. for 6 months and then 12.99% p.a. (2.00% balance transfer fee)
12.99% p.a.
$79
0% p.a. balance transfer for the first 26 months (2% BT fee applies), then moving to 12.99% p.a. thereafter. Great for consolidating debt. Plus $39 annual fee for the first year ($79 p.a. thereafter).
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12.99% p.a.
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0% p.a. for 6 months and then 12.99% p.a. (2.00% balance transfer fee)
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21.99% p.a.
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55
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2.95%
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$79
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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
Details Close
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Promoted
BankwestBankwest Breeze Platinum Mastercard
0% p.a. for 6 months and then 12.99% p.a. (2.00% balance transfer fee)
12.99% p.a.
$99
0% p.a. on balance transfers for 26 months (2% BT fee applies). Streamline your budget with a low ongoing interest rate of 12.99% p.a. Plus, enjoy complimentary overseas travel insurance as well. T&Cs Apply
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12.99% p.a.
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0% p.a. for 6 months and then 12.99% p.a. (2.00% balance transfer fee)
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21.99% p.a.
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55
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0%
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$99
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$25.00
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2%, Min $4.00
Read our Mozo Review to learn more about the Breeze Platinum Mastercard
Details Close
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Promoted
CUACUA Platinum Credit Card
0% p.a. for 18 months and then 21.74% p.a.
19.99% p.a.
$149 $0 in the first year
0% p.a. balance transfer, $0 annual fee for the first year and also receive 1 rewards point for every dollar spent. Concierge service and purchase protection insurance.
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19.99% p.a.
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0% p.a. for 18 months and then 21.74% p.a.
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21.74% p.a.
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55
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0.0
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3.40%
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$149 $0 in the first year
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$12.50
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2.00%, Min $3.50
Read our Mozo Review to learn more about the Platinum Credit Card
Details Close
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