Has Westpac’s Lite Card sparked a new low rate war among the majors?
The Westpac Lite Card entered the market with a bang on Friday, boasting perks rarely seen in low rate credit cards such as a 9.90% purchase rate, no late payment fees and $0 foreign exchange fees.
It is the lowest rate credit card among the majors some 2.59% less than the cheapest big four low rate card, leaving one to wonder whether the move will spark new competition in the low rate space.
Chief Executive Consumer Bank at Westpac, George Frazis, said the introduction of the Westpac Lite Card demonstrates the bank’s ability to think beyond traditional product models to offer customers innovative and simple products with fewer fees.
Peter Marshall, Mozo’s Product Data Manager said that the introduction of the Westpac Lite may prompt the other major banks to follow by applying rate cuts to existing cards.
The Lite Card doesn’t come without its catches as the maximum credit limit for the card is $4,000, and instead of a lump sum annual fee cardholders pay an ongoing monthly fee of $9.00. Over 12 months, this makes it the most expensive low rate card to keep active compared to other low rate cards.
Major low rate credit cards compared
Marshall said it’s a good idea that customers in the market for a new credit card compare a range of features rather than simply the purchase rate, as how much you wind up out of pocket in fees and charges depends on how you use it.
“Generally speaking, if you don’t carry a balance on your credit card, a low purchase rate isn’t really going to benefit you and you may as well opt for a rewards card with more exciting features,” he said.
“But in terms of fees, if you don’t like the sound of paying upfront annual fees then a card with small monthly charges may be suitable for you.”