A survey conducted by industry super-fund-owned bank ME showed of 2,200 respondents, 73 per cent could not disclose their credit card’s interest rate, while 40 per cent didn’t know if their credit card had an annual fee.
ME’s head of deposits and transactional banking, Nic Emery, said the findings show that the current credit card inquiry has come at a great time.
“The best thing about the current Senate Economic References Inquiry into credit card interest rates is its ability to shine a light on the high rates people could be paying, as well as making people aware that low-cost cards are available,” he said.
Despite being unaware of rates and fees, the survey revealed that 65 per cent of respondents were confident they have a credit card which best suits their needs, with 78 per cent stating they have never switched cards.
The survey also found that 36 per cent of respondents reported they were “credit card revolvers”, meaning they’re paying interest on their purchases.
Furthermore, 72 per cent said they made $500-plus purchases on their card, and of those, 35 per cent said they were revolving, demonstrating that they’re paying interest on higher amounts.
“You don’t have to accept high-cost cards given one in four cards have rates under 13 per cent but with more than 50 per cent of cards charging 19 per cent or more, many credit card users are probably paying too much,” Mr Emery said.
“Credit card providers wouldn’t be able to charge so much if people were more vigilant and exercised their right to switch.”