Those are the findings from a poll by independent research agency fiftyfive5 commissioned by Defence Bank.
The survey of more than 1,000 people found that despite Australians planning to use their credit cards more in 2021, 57% of those surveyed don't pay much attention to their credit card interest rate, while one in two question the value of card reward programs, particularly during a pandemic.
Over a third (35%) of Australians don't know what their credit card interest rate is while four out of five of those who do know what rate they're paying are paying more than 10% p.a, with some paying over 20% p.a.
The table below displays credit cards with some of the lowest interest rates on the market, disregarding any temporary promotional offers.
|N/A||$product[$field["value"]]||[FREE_SUPPLEMENTARY_CARDS, ]||3||0||15||1000||15.49||Visa||More details|
G&C Mutual Bank Low Rate Visa Credit Card
|N/A||$product[$field["value"]]||[FREE_SUPPLEMENTARY_CARDS, PARTNER_DISCOUNTS, PURCHASE_PROTECTION_INSURANCE, ]||3||0||20||500||10.24||Visa||More details|
Auswide Bank Low Rate Visa Card
|N/A||$product[$field["value"]]||[FREE_SUPPLEMENTARY_CARDS, FRAUD_PROTECTION, PURCHASE_PROTECTION_INSURANCE, ]||3||0||30||1000||-1||AMEX||More details|
American Express Low Rate Credit Card
Community First Bank Low Rate Credit Card
Easy Street Financial Services Easy Low Rate Visa Credit Card
Defence Bank CEO David Marshall says Australians need to do their research and shop around.
“It’s time to break the cycle of paying unnecessarily high credit card interest rates," Mr Marshall said.
"We see from these results that Australians are frustrated by the rates they’re paying and the bells and whistles they either can’t use or don’t need.
“Australian consumers need to stop paying 20% for the convenience of a basic credit card, when genuine low-rate options exist for half the cost.”
The survey also found that one in five credit card holders find it hard to pay off their balance after the Christmas period, but the lack of use of credit cards in recent times could translate to less Christmas credit card debt.
Credit card debt has been plummeting over the COVID period with the latest Reserve Bank figures showing the average credit card balance was $2,728 in October - close to a 14-year low.
The figures also show the number of credit cards on issue have plummeted to 12.9 million in October, the lowest since mid-2008.
Whether the reduction in credit card usage is due to stimulus payments, more frugal pandemic spending, or more people using debit cards, it's clear that there has been a marked shift in consumer behaviour over the COVID period.
A recent survey by MyState Bank found that an overwhelming majority of Australians are responding to the economic crisis by reining in their spending habits, saving and budgeting more, and by paying down their debt.
“We expect these savvy savings habits to continue, with these new behaviours among consumers outliving the recession," said MyState Bank General Manager Customer Experience Heather McGovern.
The research found 17% of those surveyed resolved to pay off their credit card and personal loan debt in 2021.