Complacency when it comes to credit cards is hurting the hip pocket of millions of Aussies, according to new research by Finder.
Finder analysis revealed the average credit card holder could be saving $100 per year by switching their credit card. That’s a whopping $1.1 billion nationwide.
More than 11 million Aussies have a credit card, with the average carrying an interest rate of 14.7 per cent, according to Finder’s Consumer Sentiment Tracker.
Aussies also have an average balance of $1,392 accruing interest, according to the latest RBA figures. Switching to a lower rate of 7.49 per cent could save the average Aussie $100 per year.
It pays to shop around
Finder credit card expert Amy Bradney-George said plenty of Aussies could save on their credit card by making a simple switch.
“Once you get a credit card, it’s easy to forget that there could be a better deal out there. But interest rates vary wildly, with some cards charging upwards of 24 per cent for purchases,” Bradney-George said.
“There’s also a wide variation in annual fees, which can cost you hundreds of dollars each year, even if you pay off the card as you go.
“Given the cost-of-living crisis, no one with a credit card should have to pay for the cost of loyalty. But if you don’t shop around after getting a card, you won’t know how much value you could get elsewhere.”
Bradney-George said credit cards could be super convenient as long as they were used responsibly.
“Having a credit card can give you access to some great perks, including rewards and interest-free offers, or even travel insurance. But if you don't pay them off quickly, they can quickly snowball into debt,” she said.
“That’s why it’s so important to get one that you can afford to pay off each month.”
The best credit cards
Bradney-George said there were hundreds of credit cards on the market in Australia, which could be overwhelming if you didn’t want to spend a lot of time searching for a new card.
“The Finder Credit Card Awards give people a point of reference to help them find a card that offers them value,” she said.
“The award winners all offer value within their categories, whether it’s about saving money on rates and fees, taking a card with you when you travel overseas or earning points you can use to pay for travel and other rewards.”
NAB’s Low Rate Credit Card took out the top gong for Best Balance Transfer Credit Card.
Bankwest’s Zero Platinum Mastercard took the top spot for Best Travel Credit Card, while American Express’s Low Rate Credit Card won two categories; Best Low Rate Credit Card and Best No Annual Fee Credit Card.
For Aussies looking to get their frequent flyer fix, ANZ’s Frequent Flyer Black won Best Frequent Flyer Credit Card - Qantas, while American Express’s Velocity Platinum Card scored Best Frequent Flyer Credit Card - Velocity.
For those looking to score bonus rewards points, the Bankwest More World Mastercard won Best Rewards Credit Card, while the American Express Essential Credit Card won Best No Annual Fee Rewards Credit Card.
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