Australian Credit Card Offers Becoming More Competitive
Posted May 27th, 2011
A new wave of credit card providers are set to hit our shores somewhere close to you soon. New players in the market want to have a slice of the pie as they recognise the need for more competition.
Recent interest rate rises have seen many lenders benefit from massive profit margins and if you paid any attention to TV ads lately you would have noticed a huge increase in credit card related advertising.
Datamonitor, a Sydney based market analyst that the combination of rising consumer awareness and more competitive products will benefit the Australian public immensely.
Petter Ingemarsson, senior financial services analyst of Datamonitor says low interest rates in Australia had not translated into lower credit card rates.
He says: “Competition is set to heat up in the Australian credit card market, and both rates and fees will come under pressure. This implies upcoming good deals for discerning consumers.”
He says that unlike mortgage rates, credit card rates are not intense community and political scrutiny.
“Concentration of market power with the big banks has also contributed to the relatively low level of competition in the credit card market at present. Although bad debts have increased slightly for credit card issuers, they have not accelerated at the pace which some feared.”
“Outstanding credit card balances have levelled off, with many consumers using government stimuli payments to reduce their level of credit card debt.”
Mr Ingemarsson also believes that most card providers are biding their time in the credit card market.
“When the economy picks up, competition for card customers and balances is set to follow suit, putting pressure on rates and fees. Smaller institutions, non-bank lenders and new entrants are expected to be the most aggressive in trying to gain market share when the rebound occurs,” he said.
He reckons that rivalry will lead to a fall in credit card fees which of course will benefit us on the bottom line so we won’t complain.
In a recent consumer survey Datamonitor reported that 64 per cent of consumers regard lower fees as the most important factor when choosing a new card. Only 7 per cent state that better rewards are the most important factor.
Source: News.com.au
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Comparison of our Top Credit Card Offers
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual Fee | Cash Advance Rate (p.a.) | |||
|---|---|---|---|---|---|---|
Citibank Clear Platinum Card | A low interest rate offer on balance transfers and purchases | 11.99% | 2.9% for 12 months | $99 | 21.74% |   |
St George Vertigo | An introductory offer on balance transfer and a low annual fee | 13.24% | 0.99% for 12 months | $55 | 21.49% | |
Virgin Flyer Credit Card | Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers | 20.99% | 1.9% for 9 months | $99 | 20.99% | |
Westpac 55 Day Credit Card | No annul fee for the first year with a low rate on balance transfers and purchases | 0% for 5 months (reverts to 19.59% ) | 3.99% for 6 months | $0 | 21.49% | |
ANZ Frequent Flyer | An exclusive bonus points offer, Plus extended warranty, overseas travel and medical insurance,90 day purchase security insurance. | 19.74% | $95 | 20.99% | |
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