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
St.GeorgeSt.George Vertigo
0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)
0% p.a. for 7 months then 13.99% p.a.
$55 $0 in the first year
Enjoy 0% p.a. for 22 months on balance transfers at card application. 1.5% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. Plus, 0% p.a. on purchases for 7 months. Rate then switches to applicable variable purchase rate. First year annual card fee waived for the first year ($55 thereafter). Available to new cards only, Eligibility criteria and T&Cs apply. Offer ends September 30th 2020.
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0% p.a. for 7 months then 13.99% p.a.
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0% p.a. for 7 months
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0% p.a. for 22 months and then 21.49% p.a. (1.50% 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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$55 $0 in the first year
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$15.00
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2%, Min $2.50
Read our Mozo Review to learn more about the Vertigo
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Promoted
CUA
CUA Low Rate Credit Card
0% p.a. for 13 months and then 21.74% p.a.
11.99% p.a.
$49 $0 in the first year
0% balance transfer rate for 13 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 13 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
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Promoted
Bankwest
Bankwest Zero Platinum Mastercard
2.99% p.a. for 9 months and then 17.99% p.a.
17.99% p.a.
$0
This card boasts no annual fee and the option to pay with the Bankwest Halo payment ring. Plus, with no foreign transaction fees and complimentary travel insurance it's a good pick for travel. Winner of a Mozo Experts Choice Award 2019 in the No Annual Fee Platinum Credit Card category^.
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17.99% p.a.
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2.99% p.a. for 9 months and then 17.99% p.a.
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21.99% p.a.
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55
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0%
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$0
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$25.00
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2%, Min $4.00
Read our Mozo Review to learn more about the Zero Platinum Mastercard
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Promoted
Hot Deal $200 Cashback Offer (T&Cs apply)
WestpacWestpac Low Rate
0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)
13.74% p.a.
$59
Enjoy 0% p.a. interest on balance transfers for the first 20 months. Get $200 cashback with $1k minimum spend on eligible purchases within 90 days of card approval. 55 interest free days and low on-going rate of 13.74% on all purchases.
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13.74% p.a.
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0% p.a. for 20 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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3.00%
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$59
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$15.00
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2%, Min $2.50, Max $150
Read our Mozo Review to learn more about the Low Rate
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