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 13 April 2024

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • NAB Low Rate Card - Balance Transfer Offer

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    Purchase rate
    13.49% p.a.
    Balance transfer rate
    0% p.a. for 28 months and then 21.74% p.a. (2.00% balance transfer fee)
    Annual fee
    $59 $0 in the first year
    Rewards program
    -
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  • Apply By 2 Apr 2024
    American Express Qantas Ultimate Card

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    Purchase rate
    23.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $450
    Rewards program
    Qantas Frequent Flyer
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    Details
  • American Express Platinum Edge Credit Card

    Enjoy $0 Annual Card Fee (usually $195) in the first year when you apply online and are approved. T&Cs apply. New Card Members only. Offer subject to change without notice.

    Purchase rate
    23.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $195 $0 in the first year
    Rewards program
    Membership Rewards
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  • American Express Explorer® Credit Card

    Receive 50,000 bonus membership rewards points when you apply online, are approved, and spend $4,000 on eligible purchases on your new card within the first 3 months (T&Cs apply). New Card Members only. Complimentary domestic & international Travel Insurance (T&Cs apply). Up to 55 days interest free on purchases. $395 annual fee.

    Purchase rate
    23.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $395
    Rewards program
    Membership Rewards
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  • Apply By 15 May 2024
    American Express Velocity Platinum Card

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    Purchase rate
    23.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $375
    Rewards program
    Velocity Frequent Flyer
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    Details

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