This week in banking news - credit cards, interest rate cuts and AMEX’s new limited time offer

Tara McCabe

Friday 11 October 2019

In this week’s banking recap, we look at the good, the bad and the ugly of interest rate cuts to home loans and savings accounts following the Reserve Bank of Australia’s decision to cut the official cash rate last Tuesday, why credit cards interest rates are going up rather than down and new energy retailers to look out for.

A dog getting a haircut - representative of interest rate cuts.

More home loan providers pass on the RBA cut

The effects of last week’s RBA cut continued to be felt this week, with more and more home loan providers passing on only a portion of the rate cut. Provider’s who jumped on board this week included: online lender Tic:Toc, Heritage Bank and Citibank, who all opted to pass on 0.15% of the 0.25% cut. This spay of home loan interest rate cuts means that finding a home loan below 3% isn’t actually too difficult at the moment. So if you are thinking of refinancing or taking out a home loan for the first time, now might be the time to do so.

More bad news for ING savers

The forecast has been looking a little grey for ING savers this week, as the online bank decided to make further cuts to its popular Savings Maximiser account. With this latest interest rate cut of 0.25% the maximum interest rate for this account dips below 2% to 1.95%,  a considerable 0.85% drop from what it stood at this time last year. 

Of course ING wasn’t alone in making cuts, with ME Bank and Commbank also dropping interest rates on savings accounts. The silver lining for ING customers is that the bank’s ongoing bonus savings account interest rate still stands fairly above the average, which is currently 1.76%* in the Mozo database, for a balance of $10,000.

Why are credit card interest rates going up? 

While the spotlight has been firmly on the falling interest rates for home loans and savings accounts, credit cards have stayed fairly quiet. Up until now that is, with statistics in Mozo’s database revealing that the average credit card rate has actually increased, since the first RBA cut in June. This means that rather than passing the RBA cut on to customers, some banks might be trying to make up for smaller interest margins with higher interest rate credit cards.

Of course there are a number of smaller banks who have been willing to pass on the rate cut to credit card customers. Auswide Bank, for example, was quick off the mark last Tuesday, passing on the full 0.25% RBA cut for its Low Rate Visa Credit Card.

AMEX gives customers the opportunity to bag 120,000 bonus Qantas Points

It’s not all doom and gloom on the credit card front of course, with American Express offering new customers the opportunity to earn 120,000 bonus Qantas Points when they sign up to the Qantas Ultimate rewards credit card.

That’s right, as of yesterday, if you’re new to AMEX and sign up online before Wednesday 6th November, you could be on your way to earning a bucket load of extra Qantas Points. You will have to spend at least $4,500 within the first 3 months of your approval date, but if that suits you fine then this may be worth looking into.

New energy retailers to look out for

Sick of hearing about rate cuts? Well not all the news this week was on the fallout from the RBA’s decision last week. Following the announcement of the 2019 winners of the Mozo Experts Choice Awards for Energy, we took at look at some new energy retailers on the block. 

Among the exciting new energy retailers on Mozo’s radar was Melbourne based, not-for-profit retailer, Powerclub. Winner of the Mozo Experts Choice Award for Electricity Retailer of the Year for NSW, SA and QLD, Powerclub strives to be honest with members, giving customers access to wholesale electricity prices on a cost per use basis.

Fellow Melbourne based retailer Elysian Energy also managed to win multiple 2019 Mozo Experts Choice Awards for Energy, including Victorian Electricity Retailer of the Year. Plus if you want even more alternative energy providers to the big names, Kogan Energy (an offshoot of Kogan.com) and amaysim might be worth looking into.

Thinking of switching energy providers? Why not head to Mozo’s Energy plan comparison page to see if you could be getting a better deal, all you have to do is pop in your postcode to see what else is on offer in your area.

*As of Wednesday 9th October, 2019.

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