Yahoo Finance Credit card loyalty costing Aussies $153 a year
Millions of Aussies are forking out hundreds of dollars more per year than they need to by being loyal to their credit card provider.
Finder conducted a nationally representative survey of 1,057 Aussies, which revealed a whopping 55 per cent of credit card holders had never switched providers.
That’s equivalent to around 6 million Aussies who could be spending hundreds of dollars each year in excess interest and missed rewards.
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The research found only 8 per cent of cardholders changed their credit card in the past year, while the remaining 35 per cent switched more than a year ago.
The analysis found credit card loyalty could cost the average cardholder $153 a year.
Finder credit card expert Amy Bradney-George said most Australians weren’t taking full advantage of the market.
“Many borrowers don’t realise the potential savings they can get from switching providers. Being too loyal means you also miss out on valuable sign-up bonuses and reward offers,” Bradney-George said.
“Some frequent flyer credit cards offer enough bonus points to fly overseas, and they’re typically only available to new cardholders.”
Aussies put a record $32.1 billion on credit cards in September 2022, according to data from the Reserve Bank of Australia (RBA) – with the average Aussie racking up $2,442.94 in debt.
Bradney-George said ‘set-and-forget’ was almost always a bad approach when it came to financial products.
“People who hold onto the same card over a long period of time are leaving money on the table. They don’t know how much they can save from comparing other cards on the market,” she said.
“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 p.a. 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.”
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