Credit card loyalty robbing Aussies of $100 savings a year: Check your card

Complacency with credit cards is leading to millions of Australians losing out on $100 a year, new research has revealed.

More than 11 million Australians have credit cards, but a failure to compare interest rates and switch cards could be costing the average consumer $100 a year, according to Finder’s latest analysis.

WATCH THE VIDEO ABOVE: Selecting the right credit card for your needs.

Finder analysis shows the average credit card holder has a 14.7 per cent interest rate on their current card and, according to the latest Reserve Bank of Australia figures, manages an average balance of $1,392 accruing interest.

The savings come into play when consumers choose to switch to a lower rate of 7.49 per cent, saving them $100 per year — $1.1 billion nationwide.

A simple switch could bring valuable cash back amid mounting cost of living expenses, says Finder credit card expert Amy Bradney-George.

“Once you get a credit card, it’s easy to forget that there could be a better deal out there,” she said.

“But interest rates vary wildly, with some cards charging upwards of 24 per cent for purchases.

“There’s also a wide variation in annual fees, which can cost you hundreds of dollars each year even if you pay off the card as you go.

“Given the cost-of-living crisis, no one with a credit card should have to pay for the cost of loyalty. But if you don’t shop around after getting a card, you won’t know how much value you could get elsewhere.”

Finder found there are more than 13 million credit cards in use nationwide as of March, with Australians taking an average of 6.5 months to pay off their debt.

Monthly purchases on credit cards reached a record high of $33.5 billion in January — a jump of 17 per cent or $4.9 billion on last year.

While credit cards offer an easy way to pay, they are only convenient as long as they are used responsibly, Bradney-George stressed.

“Having a credit card can give you access to some great perks, including rewards and interest-free offers or even travel insurance. But if you don’t pay them off quickly, they can quickly snowball into debt,” she said.

“That’s why it’s so important to get one that you can afford to pay off each month.”