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 February 27, 2021

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
  • Apply By May 31, 2021
    Bendigo Bank Low Rate Credit Card

    0% p.a. balance transfer for 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
    11.99% p.a.
    0% p.a. for 18 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    -
    Compare
    Details
  • Bankwest Zero Mastercard

    No annual fee and up to 55 days interest free on purchases. Get a notification before your minimum payment is due by setting up Easy Alerts in the Bankwest app.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    17.99% p.a.
    2.99% p.a. for 9 months and then 17.99% p.a.
    $0
    -
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    Details
  • Hot DealLimited time cashback offer
    Westpac Low Rate

    Enjoy 0% p.a. interest on balance transfers for the first 24 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.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.74% p.a.
    0% p.a. for 24 months and then 21.49% p.a. (1.00% balance transfer fee)
    $59
    -
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    Details
  • ME frank Credit Card

    Meet Frank, a low rate credit card with up to 55 interest free days and no annual fee. If simple, hassle free spending is your goal, you and Frank might be a match made in heaven.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    11.99% p.a.
    No current offer
    $0
    -
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    Details
  • Apply By February 28, 2021
    NAB Qantas Rewards Signature Card

    NABs fastest way to earn Qantas Points. 130,000 bonus Qantas Points when you spend $3,000 on everyday purchases within 60 days of account opening and keep the card open for 12 months. 7 complimentary insurances when you meet eligibility criteria including Overseas Travel Insurance.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.99% p.a.
    0% p.a. for 6 months and then 21.74% p.a. (2.00% balance transfer fee)
    $395 $295 in the first year
    Qantas Frequent Flyer
    Compare
    Details

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