Promotional offers drive competition in the credit card industry: IBISWorld

Increased competition in the credit card industry has benefitted customers, who now have access to a variety of promotional offers including interest-free periods, honeymoon periods and balance transfer deals.

While these offers put downward pressure on provider revenue, according to IBISWorld the increased uptake of credit cards as a result has led to record revenue growth for credit card issuers of 2.8% over the five years through 2015-16, bolstered by annual, cash advance and other fees.

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However, the credit card industry still faces a number of challenges. Weak household consumer sentiment, combined with more consumers paying down their debt, or taking advantage of interest-free periods, has led to a lower proportion of interest-generating credit card debt.

Increasing debit card use, from 34.2% to 42.5% of all payment card transactions, has provided added competition in the sector, as debit cards generally don’t charge an interest rate, and generate less revenue due to lower fees.

To tackle these challenges, credit card issuers have implemented a number of strategies to drive up the number of credit card accounts, particularly as the total value of credit card balances in Australia is set to fall. Fees are expected to become a significant source of growth, and credit card issuers are tipped to expand promotional offers and boost market expenditure to win more credit card accounts.

The introduction of new payment technologies has also boosted fee revenue for credit card administrators. Visa’s payWave and Mastercard’s payPass have increased the convenience of payment and encouraged more spending on credit and debit cards, benefitting administrators. As competition increases and newer technologies are adopted, the gradual shift to a cashless society is expected to open up further opportunities in the credit card sector.

Credit card comparisons on Mozo - last updated 18 January 2022

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • Apply By 28 Feb 2022
    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for up to 18 months (Reverts to 11.99% p.a). Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 18 months then 11.99% p.a.
    No current offer
    $45
    -
    Details
  • Virgin Money Virgin Australia Velocity Flyer Card - Bonus Points Offer

    Earn up to 100,000 bonus points in the first 4 months (conditions apply) and 0% Balance transfer for 18 months

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    0% p.a. for 18 months and then 20.99% p.a.
    $129 $64 in the first year
    Velocity Frequent Flyer
    Details
  • Westpac Low Rate

    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.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.74% p.a.
    0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
    $59 $0 in the first year
    -
    Details
  • humm90 Mastercard

    With up to 110 days interest free on your spending, this card is pretty unique in the market, and great for managing your daily spend. Plus, no foreign transaction fees overseas or online. Plus $400 cash back when you spend $4,000 on eligible purchases within first 120 days (T&Cs apply).

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    23.99% p.a.
    No current offer
    $99 $0 in the first year
    -
    Details

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