Yahoo Finance Westpac, ANZ, NAB join CBA in hiking interest rates on credit cards
All of the Big Four banks will be charging interest rates of 20.99 per cent by the end of June.
Westpac, ANZ, NAB and CBA have all hiked their credit card interest rates, and experts are urging customers to shop around for a better deal.
Westpac is the latest of the major banks to announce increases on several of its credit card products, with the higher rates kicking in mid-year.
Purchase rates on Westpac’s Rewards and Low Fee credit cards will increase by up to 1.25 per cent to 20.99 per cent, while cash advance rates on all credit cards will increase by 0.5 per cent to 21.99 per cent from June 20, 2024.
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Mozo spokesperson Rachel Wastell said the changes meant all of the Big Four banks would be charging purchase rates of 20.99 per cent by the end of June.
"Over the past few months, the Big Four banks have been hiking fees and rates, and reducing rewards offers on a number of different credit card products,” Wastell said.
"Surprisingly, these moves have been ‘flying under the radar’ but Mozo data shows they’re coming in thick and fast.”
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ANZ increased purchase rates by 0.5 per cent to 20.99 per cent across a range of credit cards in February, while NAB raised purchase rates by 1.0 per cent to 20.99 per cent for its Rewards cards and 13.49 per cent for its Low Rate card last month.
Australia’s biggest bank, CBA, hiked monthly fees on its no-interest credit card Neo by up to $5 per month last month. It comes after the bank increased interest rates by 0.75 to 1.25 per cent across all cards in November, with the majority now at 20.99 per cent and the Low Rate card at 13.99 per cent.
Credit card interest rates do not move in line with Reserve Bank (RBA) decisions and banks can hike rates on cards at any time.
Household credit card debt rose by $269.5 million in January, the latest RBA data found, the biggest monthly increase since November 2022. This took the country’s total credit card bill to $17.58 billion.
The average interest rate is 18.14 per cent, meaning households are collectively paying out just under $8.8 million in interest charges per day.
Lowest-rate credit cards
With the Big Four banks charging up to 20.99 per cent interest on credit cards, there could be cheaper options worth considering.
"There are still a number of low-rate credit cards below 10 per cent so, if you haven't compared cards lately and you're currently paying double-digit interest, now is the time to shop around,” Wastell said.
Here are the lowest-rate credit cards:
G&C Mutual Bank - Low Rate Visa Credit Card - 7.49 per cent
Community First Bank - Low Rate Credit Card - 8.99 per cent
Defence Bank - Foundation Credit card - 8.99 per cent
Easy Street - Easy Low Rate Visa Credit Card - 8.99 per cent
Illawarra Credit Union - Low Rate Credit Card - 8.99 per cent
MOVE Bank - Low Rate Credit Card - 8.99 per cent
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