Australia credit cards competition heating up

July 1, 2009

Unlike their counterparts in US or UK, the credit cards issuers in Australia is busy competing in the Australia low interest credit cards market.

The sparks in low interest credit cards in Australia is led by Aussie MasterCard which launched the “9.99%p.a. on purchases for the first 12 months” and “4.99% p.a. on balance transfers for first 12 months” offers. This is followed by ANZ Low Rate MasterCard with a “low interest rate of 4.9% p.a. on purchases or the first 12 months” deals.

BankWest who is the leader in low interest rate credit card segment, finally responded with “Australia’s lowest MasterCard purchase rate
and longest balance transfer offer” on 29th June.

With savvy marketing copy such as “if your current credit card is with one of the big four banks, then you’re probably paying too much”, it is about time BankWest have to respond accordingly to maintain their position.

Instead of offering a low rate on purchases for 12 months, BankWest decided to go to the extreme by offering 9.99%p.a. with no specific time limit. And the “4.99% p.a. on Balance Transfers for 15 months” is by far the longest you can get, exceeding the norm of 6 to 12 months balance transfer offers in the Australia market.

This “low rate war” is not surprising since 70% of Australians want a lower rate on their credit card. Unfortunately, this healthy competition may not happened in US or UK in the near term.

Such scene is something new and refreshing, a good news to the consumer considering the current economy woes and financial instability.

Perhaps this shown the banking system down under is more solid than those in US and UK. As well as the willingness to compete wisely for a win-win situation.