Aussies owe less, but pay more

Credit card debt is a fact of life for many Australian households and with an official cash rate of just 2.50% it may be surprising for some to realise that the average interest rate being paid on a standard credit card is more than 17%. With a national balance of just over $34 billion accruing interest, Aussies are collectively paying an average annual credit card cost of $5.8 billion.

While the official cash rate has fallen post-GFC, the average credit card interest rate has been predominantly on the rise. In total, the gap between the average standard credit card interest rate on CANSTAR′s database and the official cash rate has widened by 6.51% over the past six years.

Date Average standard credit card interest rate Official Cash rate
1-Nov-07 14.51% 6.50%
1-Nov-08 15.79% 6.00%
1-Nov-09 15.31% 3.25%
1-Nov-10 16.44% 4.50%
1-Nov-11 16.88% 4.75%
1-Nov-12 17.01% 3.25%
1-Oct-13 17.02% 2.50%

Source: CANSTAR, RBA

There is, however, a wide variation of interest rates on offer for the savvy shopper – check out the current minimum, maximum and average credit card interst rates on CANSTAR′s database here.

Who offers outstanding value?

Choosing a credit card that′s right for you depends on what type of spender you are. Do you spend a lot but always pay off the balance? DoO you constantly juggle an ongoing credit card debt? Do you fall somewhere in between?

Irrespective, there is no shortage of credit cards vying for your  business. Check out CANSTAR′s credit card star ratings report and create a shopping list of credit cards that suit your needs.

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