Today I have an interview with Andrew Boyd from Credit card Compare. I hope you find the information that Andrew shares as interesting as I did.


Can you please tell me a little bit about your site and how it can benefit users?

Credit Card Compare is a comparison website that offers Australian consumers a really easy way to compare more than 300 credit card offers from a range of banks from the Big Four all the way down to your local credit union.

We also provide a number of free-to-use tools and have a regularly updated blog with money hacks and personal finance tips.


How competitive do you feel the Australian credit card market is?

To be honest, the Big Four banks (that’s ANZ, CommBank, NAB and Westpac) have it fairly well tied up among themselves. There are some smaller players trying to shake things up a bit: HSBC have been promoting some good introductory offers; Aussie, Worthworths and Coles do their own thing; and American Express pitch their offers to the upper echelons of the market. In comparison to the UK and US markets, it has to be said that Australia is not very competitive.

It is a chicken-and-egg situation that the consumer has a role to play in. In other countries, consumers tend to be better informed or less loyal to their bank. In Australia, there is a latent, unreciprocated loyalty to whatever bank your parents set you up with as a kid. While admirable, it doesn’t necessarily mean you get the lowest interest rates – far from it in fact. Also, Australian consumers are less aware of the financial instruments available to them, such as low/no interest balance transfers. As a result, the demand isn’t as high as it could be. And if the demand isn’t there, you can’t expect it to be addressed.

Also, market size comes into play. A market like the UK is three times larger than ours in terms of population. The lack of loyalty, especially post GFC, and widespread adoption of the comparison mentality means that there is a huge addressable market for which the banks have to compete. That’s why you see 0% for 26 months on balance transfers in the UK versus 0% for 9 months in the Australia, which is about as good as you’ll get at the time of writing.

Credit Card

Do the smaller lenders tend to have better or worse deals?

That really depends on how define a small lender. If by ‘small’ you mean a credit union, then you’ll find that there’s not a huge difference. We did a piece of research which we recently released that aggregates the rates and fees charged by the Big Four banks and then compares the results with what’s on offer from the leading group of credit unions. If you look at those data in aggregate, the credit unions come out slightly ahead with lower average interest rates on purchases and cheaper annual fees. However, ANZ  et al have cheaper promotional balance transfer offers, which is to be expected as that’s how they attract new customers.


How big of a discrepancy is there between the biggest and smallest interest rates?

It’s pretty big. Take ANZ’s Low Rate MasterCard, which currently offers 0% for 9 months, reverting to 13.14%, with a $58 annual fee. Compare that to CommBank’s ‘equivalent’, the CBA Low Rate Credit Card, which is offering 5.99% for just 5 months, reverting to 21.49%, with a $78 annual fee. Not only does the CBA card have a much higher introductory interest rate, but the rate that is charged after the introductory promotional rate expires is more than 8% higher. This is just one example, and there are many more.


How often do the interest rates change for the various lenders and are there any really good deals on at the moment?

It really does pay to take a little extra time to see what’s on the market as opposed to taking whatever the bank offers in the post. The banks aren’t inclined to change their interest rates at set times, but the market does tend to heat up as summer and Christmas approaches. That’s not to say there aren’t any good deals at other times of the year. At the risk of sounding like their salesman (which I’m not), right now ANZ have a very good deal on their Low Rate MasterCard: 0% for 9 months on balance transfers, reverting to 13.14%, and a very affordable annual fee of $58. HSBC are offering 0% on balance transfers for 6 months with no annual fee, but once the balance transfer deal expires the rate charged reverts to 21.99% – the same as they charge for cash advances. We have collated more cheap deals on our balance transfer page.


Can you tell me about the most common types of fees that customers get hit with. Do you have any tips to help avoid them?

Late fees are probably the most common one. We did a survey in 2012 and found that 57% of respondents had been hit with late payment penalty fees. The easiest way you can take care of those is obvious: pay your bill on time. And the easiest way to do that is to set up an automatic payment to cover the minimum owed at the least. A lot of people also incur a fee for spending more than their credit limit permits. Again, this one can be address easily by monitoring the account balance on a regular basis. The annual fee is also common, but there are plenty of standard level cards that don’t charge any annual fees at all. Just be aware that some banks run offers with one year without an annual fee, reverting to the standard annual fee for each subsequent year the account remains open.


Have you got any other handy hints for people when they are looking for credit cards?

First of all, you really need to know what it is you want and the only way to know what you want is to analyse your financial situation first to find out what you need. Secondly, if you’re sick of paying interest hand over fist, then use a cheap balance transfer offers to reduce your interest repayments, free up some cash and get out of debt faster. If you own a small business, look for cards that offer business level features, like BAS assistance and compatibility with accounting tools such as Xero. And lastly, if you spend a lot and always repay your balance in full, then your profile is a good candidate for a credit card with a rewards program, perhaps linked to an airline such as Qantas or Virgin Australia.


I would like to thank Andrew for his time and insight in answering my questions, and I encourage you to visit his site if you are in the market for a credit card.


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