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.


Financial Mismanagement Main Reason for Credit Card Debt

June 17, 2009

With the recent 26-year high U.S. jobless rate of 9.4% in May 2009, it is easy to blame job loss as the main culprit for increasing credit card debt.

However, according to nonprofit NFCC(National Foundation for Credit Counseling) which helping financially desperate consumers, financial mismanagement is the main cause of financial distress. And job losses came in only second.

The number of people seeking help increase double-fold from 1.5 million in 2006 to 3.2 million in 2008.

What is more disturbing is people who seek counselling with NFCC had six credit cards with unsecured debt totaling 62% of their total household income. Be reminded that this debt is strictly credit card debt, not taking into account of their house or vehicle loan.

U.S. Credit Cards Charge-off Rate Rise in May

June 16, 2009

Capital One said the annualized net charge-off rate for U.S. credit cards, debts the company believes it will never collect, rose to 9.41 percent in May from 8.56 percent in April.

This trend is followed by every other major credit card issuers in US, which are reporting high and rising default rate.

This is lead by Bank of America reporting high charge-off rate of 12.50% in May, follow by American Express 10.4% charge-off in the same period.

Meanwhile, Citigroup the largest issuer of MasterCard branded credit cards reported charge-off rate of 10.50% in May. For record, Discover charge-off rate increased to 8.91% in the same period.

The spike in credit cards default in US is inline with the recent announced U.S. jobless rate in May, which rose to a 26-year record high of 9.4%.

The delinquency rates, an indicator of future credit losses, fell across the industry though. However, the delinquency rates is expected to rise in coming months. Analysts believe the decline was due to a seasonal trend, as consumers used tax refunds to pay their debts.

Debit Card Purchases in Australia increased by 17.52%

April 13, 2009

For the 12 months period(January 2008 to December 2008), the total purchases made using debit cards in Australia has increased by a whopping 17.52%(A$16.17 billion) if compares to the same period in 2007.

This is a significant growth taking into the fact that the number of debit card users has only increased by 5.03% or 1,385,653 in the same period.

For detailed statistics such as the total number of debit card users, the total debit card transactions(cash-out as well as purchases), the total ATM cash withdrawals made using debit cards, etc., visit the site, Australia debit cards online application.

Canadian Total Credit Card Outstanding Balances increased by 10.07%

March 31, 2009

Facts about Canada credit cards based on statistics released by the Bank of Canada.

The total credit card outstanding balances as at December 2007 is CAD$48.505 billion, compares to CAD$53.390 billion as at December 2008. This figures indicate an increase of 10.07% in the 12 months period.

Surprisingly, the outstanding amount is reduced to CAD$51.611 billion as at February 2009, a decreased of 3.33%.

As of Q3 2008, the statistic shows residents in Ontario made up 45.46% of the outstanding credit card balances in Canada.

Click here for interesting statistics on Canadian credit cards including detailed outstanding credit card balances breakdown by province.

Singaporeans Credit Card Selection Criteria and Payment Habit

March 25, 2009

Survey shown when it comes to credit card selection for Singaporeans, the following criteria are on top of thier mind:-
convenience of use and protection, economics, and flexibility.

Interestingly, the males and females are attracted to different factors when choosing a credit card. Females were shown to value the promotional factor more, while males preferred the economic factor.

The following groups in Singapore tends to pay their monthly credit card balances in full:-
higher income earners, the better educated, older adults, females, married, and both Chinese and Indians.

Bad Debts Written Off for Credit Cards in Singapore increased by 5.97%

March 25, 2009

In the credit and charge card statistics, Monetary Authority of Singapore(MAS) shown that there are 4,472,262 of main cardholders and 1,173,988 of supplementary cardholders in Singapore as at 2007.

In December 2008, there are 5,056,582 of main cardholders and 1,221,333 of supplementary cardholders in Singapore. This is an increase of by 584,320 or 13.07% in 12 months period, while the supplementary cardholders has increased by 47,345 or 4.03% in the same period.

For detailed statistics such as total card billings, rollover balance and bad debts written off, please visit the site at Singapore credit cards comparison and online applications

The bad debts written off increased in 12 months(from 2007 to 2008) by 5.97% to S$S$115.4 million.