State Of The Australian Credit Card Industry: Statistics & Trends Report

The Australian credit card industry could be said to be in a state of flux. The global economic crisis has caused many people to rethink their approach to, and relationship with, credit in general, and credit cards in particular.

Many people have been forced to start living within their means as the luxury of spending on credit has taken second place to the need to keep a roof over their head and food on their plate.

The increased advertising you may have seen is a sign that credit card providers are actively seeking new customers. In past years, credit cards were a must-have item, and providers did not need to be so proactive or fiercely competitive. Now, debit cards are becoming increasingly more popular, and the Australian credit card industry is responding accordingly.

The figures confirm their need to worry. Between July 2008 and July 2009, credit card usage rose by just 3%, which equated to 1.7% in dollar value. Debit card usage over the same period shot up 32.5%, equating to 31.3% in dollar value. Because a debit card only taps the available resources of your bank account, they prevent debt from building up and remove the temptation to make that extra unaffordable purchase made possible with a credit card.

However, there may be another reason why the Australian credit card industry is so keen on drumming up new business. That’s because the new business they are seeking will not last indefinitely, and this is evidenced in other parts of the world. A recent study compared the credit card industries in Australia, New Zealand, the United Kingdom and Ireland, and found that Australia is the only market where any new business is at all possible. The other countries are already saturated. It was the same situation with mobile phones, when there was an incredible market at first, and now there are so many mobile phones out there that the main focus is repeat business, or snatching business from other providers.

In effect, this makes it a buyer’s market, and this is reflected in the offers currently being advertised. Whereas credit cards used to be more of an either/or proposition, where one great feature was usually balanced by a “hit” elsewhere, many cards are now offering a range of attractive features.

To get a better idea of customer reactions to the Australian credit card industry, we can take a look at some of the findings of this year’s Australian Consumer Credit Card & Banking Survey:

• 58.8% only applied to their existing bank for a credit card, possibly because …
• 26.7% wanted to know their application would be accepted, and …
• 72.7% were happy or very happy with the service their bank provided
• 4.5% applied for the first offer they saw
• Only 6% used comparison websites, which is odd considering ..
• Getting the best deal was cited as the most important consideration when choosing a credit card
• 44.5% had not switched their credit card for 11 years or more
• 43.4% had two credit cards or more
• Over 50% were happy with their current card
• Nearly 80% thought it unfair that Reserve Bank interest rate cuts were not reflected in credit card rates
• 57% thought the Australian Government should create a ‘people’s bank’
• 23% thought a 0% balance transfer facility was important, but 38.3% weren’t bothered
• 50.5% said they rarely had an unpaid debt on their card
• 13.9% had “a fair bit” of debt
• 10% only pay the minimum amount each month
• 13.9% considered card colour and branding important. (Probably those with the “fair bit” of debt.)

Related posts:

1. Australian Credit Card Statistics: Payment Transactions Volume & Value
2. Australian Credit Card Statistics: Number Of Credit Card Accounts
3. Credit Balance Transfer Awareness and Trends in Australia
4. Australian Credit Card Fraud Statistics
5. Credit Card Use: Australian Credit Card Usage Statistics
6. Myer One Credit Card Statistics
7. Credit Card Glossary – Dictionary Definitions of Common Industry Terms

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
St George Vertigo	Editor's Choice: Low Interest Low 2.99% for 6 months (reverts to 11.99%) p.a. interest rate and balance transfer rate, from one of Australia's most respected banks.	2.99% for 6 months (reverts to 11.99%)	20.74%	2.99% for 6 months	$55	55
Coles Group Source MasterCard	The Coles Group Source MasterCard has no annual fee, a 0% p.a. balance transfer offer for 6 months, with a rewards program including savings on fuel and FlyBuys Points	19.74%	21.99%	0% for 6 months	$0	62
Bankwest Zero Platinum MasterCard	Editor's Choice: No Annual Fee Excellent introductory offer with a $0 annual fee for the life of the credit card and a 1.99% p.a. for 9 months on balance transfers	16.99%	16.99%	1.99% for 9 months	$0	55