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Accountants could help save their clients thousands of dollars a year simply by getting them to change their card provider.
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Credit card complacency ‘costs consumers thousands’
30 November 2022
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9 minute read
Failure to change credit cards is costing consumers hundreds of dollars in fees each year and more than half — 55 per cent — have never switched, research from Finder reveals.
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The survey estimated 6 million Aussies have stuck with their primary credit card while 35 per cent switched more than a year ago and just 8 per cent have changed in the past 12 months.
Analysis showed credit card loyalty could cost the average card holder $153 a year and credit card expert at Finder, Amy Bradney-George, said most consumers were failing to take advantage of the market.
“Many borrowers don’t realise the potential savings they can get from switching providers,” she said. “Being too loyal means you also miss out on valuable sign-up bonuses and reward offers.
“Some frequent flyer credit cards offer enough bonus points to fly overseas, and they're typically only available to new cardholders.”
Australians put a record $32.1 billion on credit cards in September 2022 according to data from the RBA, with the average spender racking up $2,442.94.
Ms Bradney-George said ‘set-and-forget’ was almost always a bad approach for financial products.
“People who hold on to the same card over a long period are leaving money on the table,” she said. “They don’t know how much they can save from comparing other cards on the market.
“If you’ve got an older credit card, the interest rate is probably not competitive anymore.”
According to RBA data, the average credit card interest rate is around 20 per cent per annum.
Ms Bradney-George said many new cards had a 0 per cent balance transfer period for as long as 36 months.
“If you are carrying a $5,000 balance on a regular credit card, you could save more than $2,000 in interest by doing a balance transfer to some cards.”
The Finder research surveyed 1,057 consumers, 563 of which are credit card holders.
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