Let’s give credit card rates the chop, says VIC Treasurer

Last week Victorian Treasurer Tim Pallas threw down the gauntlet to Federal Treasurer Josh Frydenberg asking for credit card interest rates to be slashed. 

He argued that although the cost of borrowing money has plummeted over the past few years, credit card interest rates have remained the same. 

“That is unfair, it is unreasonable, and it’s unconscionable, and it has to stop,” he said.“The Commonwealth needs to step up.”

To get credit card interest rates under control, Pallas has also demanded a review into how rates are set and regulated within Australia. 

It might not be that much of a bold statement either, as credit card rates have barely moved, despite the fact that the official cash rate currently sits at 0.1% 

Mozo research from November last year revealed that by failing to pass on 4.40% in RBA rate cuts over the past eight years, credit card providers have profited an eye-watering $6.4 billion. 

According to Pallas, the move to reduce credit card interest rates would help the banks “re-establish their credibility” with customers. 

While it’s unclear whether this idea will come to fruition, credit card holders can take action now against their card’s interest rate by making the switch to a better deal. 

According to the Mozo database, the average credit card rate is 16.87%, while the lowest sits at 7.49%, so there are some decent savings to be made by shopping around.

How to switch credit cards in four steps

If you believe you could be getting a better deal on your credit card, then you might be thinking about switching. The good news is, switching out your plastic isn’t that much of a hassle. In fact, it can be done with four simple steps.

• Map out your likes and dislikes. Although this might seem silly, understanding what you want and don’t want in your next credit card is essential and will help narrow down your search once you start shopping around. This could include the interest rate, annual fee or a rewards program. 
• Get comparing! The next step is to head on over to Mozo’s credit card comparison tool to start your search. With our tool, you could find the right option for you, as there are more than 200 credit cards in our database and you'll have the ability to filter your preferences. 
• Start the application process. Once you’ve found your credit card match, you’ll then need to submit an application for the new card and await approval. How your current balance gets moved across onto the new card will depend on the provider, as some may take care of this for you. 
• Double-check billing details. If you’ve used your old credit card to pay for regular bills and other expenses, make sure you change the billing details to avoid defaulting on payments.

Ready to start your search? Make your next stop our credit card comparison tool! Or if you’d like more information on switching credit cards, have a read of our guide.