Good news for credit card customers with Westpac and its subsidiaries, St. George, Bank of Melbourne and BankSA, reducing their credit card purchase rates by between 0.25% and 0.50%.
The big four bank has reduced rates for the following credit cards:
- Westpac cuts rates on the Altitude Platinum and Altitude Black cards range from 20.49% to 19.99%. This reduction applies to both Altitude Rewards, Qantas Rewards or Velocity Rewards cards.
- St.George/BOM and BankSA cut the Amplify Platinum and Amplify Signature range from 19.74% to 19.49%. This reduction applies to both Altitude Rewards and Qantas Rewards cards.
The reduction comes a few days after Westpac made changes to its home loan products so that it no longer offers mortgage rates below 2%, as well as shortly after its third home loan rate hike for November alone.
It is evident that the big bank is shaking up the interest rates on several its financial products. For Westpac customers looking to put their holiday spending on their plastic, this reduction may offer some relief come the credit card statement in January.
How much is your credit card bill costing you?
For non-Westpac customers, this change comes as a timely reminder to review their credit card interest rates ahead of the holiday season.
Especially as recent research from RateCity found that 80% of credit card users with outstanding balances don’t even know what interest rate they are paying.
Of the people paying interest, RateCity research found that a quarter of respondents have debts of less than $1,000. However, 10% reported having a credit card debt of $20,000 or higher.
RateCity’s database shows that the average credit card rate currently sits at 16.33%, but there are 19 credit cards charging purchase rates below 10%.
Accounts with debts of $20,000 paying the average rate of 16.33% would see a monthly interest charge of $279.26 (assuming paying minimum repayments of 2.5%). But on the lowest rate credit card at 7.49%, this would slash this credit card bill by over half to only $127.62 per month.
As we now enter December, if you’re considering putting part, or all, of your Christmas spending on your credit card, it’s crucial that you review your credit card interest rate ahead of time. If you’re the type of card user that often struggles to repay a bill in full, then paying a higher-than-expected interest rate may put financial pressure on your household budget.
Setting a spending limit, creating a strict shopping list, and tinkering with your budget to account for making more than minimum repayments on your credit card bill may go a long way in reducing financial stress over the holiday season.