Aussies crushing credit card debt: Leading low rate credit cards
Mozo says switching cards could shave $1.66 billion off the national credit card debt
17 November 2021
- Australians are carrying forward a national monthly credit card debt of $17.68 billion, down from $26.98 billion in March 2020
- Switching to a low rate credit card with the best ongoing rate could wipe $1.66 billion annually off the national balance
- The highest interest rate in Mozo’s database is 24.5%, which is 17.01% above the lowest rate available through G&C Mutual Bank (7.49%)
- Mozo analysed 211 personal and 48 business credit card products issued by 75 Australian financial institutions
Financial comparison site Mozo.com.au has found if Australians switched from their high interest rate credit cards to the leading low rate card collectively they could bank an annual saving of $1.66 billion.
“As we head into peak retail season, now is a great time to get on top of your credit card debt before you tap up an even bigger balance,” says Mozo spokesperson Tom Godfrey.
“If you’re carrying a balance forward on your premium credit card, something as simple as switching to a leading low rate card may reduce your monthly interest repayments and could help you pay down your debt sooner.”
With the RBA’s latest data showing as a nation we are carrying forward a monthly credit card debt of $17.68 billion down from $26.98 billion in March 2020, Mozo’s analysis found that by sticking with high interest rate cards we’re failing to bank a potential $138 million monthly saving.
“At a time when travel linked rewards on high interest rate credit cards are still struggling to take off, it can be hard to get value through this premium card category,” Godfrey says.
“Also, with many Australians switching to buy-now-pay-later, paying down debt and unable to get as much value through rewards programs, credit cards are not getting the workout they have previously,” says Godfrey.
Mozo credit card analysis found the highest interest rate in its database is 24.5%, which is 17.01% above the lowest rate available. It also found the average credit card interest rate is around 17%.
“Although it might change as international travel becomes widely available, at the moment it’s still hard to justify paying skyhigh interest rates on premium credit cards,” says Godfrey.
Among the leading low rate credit cards in Mozo’s database (excluding cards with 0% intro rate terms and the 'no interest' cards with a monthly fee) are G&C Mutual Bank 7.49% and Auswide 8.05%.
Mozo analysed 211 personal and 48 business credit card products issued by 75 Australian financial institutions for its 2021 Mozo’s Expert Choice Awards. For more information on this years MECA Credit Card Winners.
Notes: Source: RBA Credit and Charge Card Statistics - C1.1 - Balances Accruing Interest: https://www.rba.gov.au/statistics/frequency/retail-payments/2021/retail-payments-0921.html. Comparing the lowest ongoing purchase rate of 7.49% to the average purchase rate in the Mozo database, 17%, against the total national interest accruing credit card balance in October 2021, compounded monthly over 12 months.