In assessing 150 credit cards from 45 providers over a six-month period as part of the Awards based on price and features, Canstar’s researchers calculated that for those looking for a no-frills, low-cost option, Award-winning providers’ top-performing cards could offer significant savings in interest and fees to consumers, while rewards and frequent flyer cardholders could stand to earn hundreds more in rewards value.
In this article:
Low cost credit cards: Award winners vs rest of database average
Canstar data showed Award-winning providers’ best performing cards came with significantly lower interest rates and fees.
Average interest (purchase) rate
- Award winners’ 5-Star Rated low rate cards: 8.38%
- Rest of database low rate cards: 16.81%
Average annual fee
- Award winners’ 5-Star Rated low fee cards: $0
- Rest of database low fee cards: $94
Source: www.canstar.com.au. Award winner figures based on Low Cost Award Winners’ 5 Star Rated cards under the Low Rate and Low Fee profiles from the Credit Cards Star Ratings Methodology 2021. Rates and fees as of 14 April 2021.
Rewards and frequent flyer cards: Award winners vs rest of database average
For rewards and frequent flyer cards, the average net reward return (the value of points earned minus the cost of fees and interest) was much higher for Award winners’ top performing cards, Canstar Research found.
Average frequent flyer card net reward return for $36,000 spend
- Award winners’ 5-Star Rated cards: $547
- Rest of database: $181
Average rewards card net reward return for $36,000 spend
- Award winners’ 5-Star Rated cards: $261
- Rest of database: $10
Source: www.canstar.com.au. Award winner figures based on Frequent Flyer and Rewards Award Winners’ 5 Star Rated cards under the Frequent Flyer and Rewards profiles from the Canstar 2021 Credit Card Awards & Star Ratings (Apr, 2021). Net reward return deducts annual fee and interest charges from the value of earnings. Interest charges are one month of interest charges on a revolving balance of $1,500 for $36k annual spend profile. Earn is based on the following spend proportions across categories: $36k – 28% staple, 18% discretionary, 7% petrol, 5% holidays, 7% dining, 35% other.
Outstanding Value Credit Card Award winners 2021
Canstar recognised Outstanding Value credit cards providers in three separate categories: Low Cost Credit Cards, Frequent Flyer Credit Cards and Rewards Credit Cards . The Awards results are based on the overall performance of the providers’ eligible cards in Canstar’s Credit Card Star Ratings.
Low Cost Credit Cards Outstanding Value Award winners
The only provider to win an Award in all three categories, American Express’s standout product in the Low Cost category was its Low Rate Credit Card. This card comes with a purchase rate of 8.99% p.a and $0 annual fee.
Auswide Bank has won an Outstanding Value Credit Card Award in the Low Cost category thanks to its Low Rate Visa Credit Card, which offers cardholders an interest rate of 8.05% on purchases and a $50 annual fee.
With an ongoing interest rate of 8.99% p.a. (3.99% intro rate for six months) and an annual fee of $45 (half of which is donated to the Defence Bank Foundation each year the card is held), the Defence Bank Foundation Credit Card was one of the standout performers in the Low Rate Star Rating consumer profile.
G&C Mutual Bank
The standout product for G&C Mutual Bank was its Low Rate Visa Credit Card, which comes with an interest rate of 7.49% on purchases and a $50 annual fee.
Heritage Bank won a Low Cost Credit Cards Outstanding Value Award, with its Gold Low Rate Credit Card coming with a $0 annual fee and purchase rate of 10.80% p.a., as well as 0% interest on balance transfers for 12 months for eligible customers.
Teachers Mutual Bank (including UniBank)
Another of the standout providers in this category, Teachers Mutual Bank, has a Visa Credit Card that comes with an ongoing interest rate of 11.50% p.a (7.90% intro rate for six months) and a $0 annual fee.
Frequent Flyer Credit Cards Outstanding Value winners
With a broad range of eligible products in this category, American Express won an Award based on the combined performance of its cards across the factors considered. The individual cards from American Express found to offer 5-Star value in at least one consumer profile were the Platinum Edge Credit Card, Explorer Credit Card, Velocity Escape Card, Velocity Platinum Card and the Qantas Ultimate Card.
Commonwealth Bank emerged as one of the standout providers in the Frequent Flyer category. Depending on the specific card, CommBank customers can earn points that can be used with the Qantas or Velocity frequent flyer programs. CommBank’s Ultimate Awards credit card received a 5-Star Rating in a number of consumer profiles, for both its Qantas and Rewards options.
Rewards Credit Cards Outstanding Value winners
American Express offers a range of cards in this category and their combined performance saw it take one of the Awards. The cards considered which received a 5-Star Rating in at least one consumer profile were: the American Express Essential Credit Card, the David Jones American Express Platinum Card (Rewards option), and the David Jones American Express Card (Rewards option).
Coles is one of the winners in the Rewards category thanks to the combined performance of its eligible cards in this category. In particular, Coles’ Rewards Mastercard received a 5-Star Rating in different consumer profiles based on annual spend levels. Among the perks offered to Coles credit cardholders is the ability to earn Flybuys on eligible purchases.
In addition to its win in the Frequent Flyer category, Commonwealth Bank’s win in this category was thanks to the overall performance of its suite of Awards credit cards, including the Ultimate Awards credit card (Rewards option) which received a 5-Star Rating in a number of relevant consumer profiles. Eligible CommBank credit cards allow cardholders to earn points in its CommBank Awards program.
How were credit cards and providers assessed?
Canstar’s Outstanding Value Credit Card Awards recognise providers based on how their range of products performed overall in our Credit Card Star Ratings. These Ratings assess individual cards based on price and features across one or more consumer profiles designed to reflect the spending habits and priorities of different kinds of cardholders.
Cards were split into four main types for assessment in the Star Ratings:
- Low rate – for consumers who want a low rate and flexible repayment conditions
- Low fee – for those looking for a low ongoing fee and potential access to some premium features
- Rewards – for those who want to earn a return on their everyday spending, in the form of cash-back, giftcards or lifestyle rewards, for example
- Frequent flyer – suitable for those who want to be able to redeem card points for flights. In the 2021 Award, only a selection of domestic flight routes were considered
Providers’ scores in the low rate and low fee card types were combined 50:50 to assess the overall winners in the Low Cost Award category.
Canstar Research considered a range of factors when assessing products, with different weightings applied. For example:
- Fees, including annual fees, late payment fees and dishonour fees
- Interest rates, including purchase rates and cash advance rates
- Number of interest-free days offered on purchases
- Standard features such as purchase protection insurance and online card management
- Premium features such as additional complimentary insurance and concierge services (where applicable)
- Loyalty or rewards programs such as frequent flyer schemes
To learn more about how the Award winners were determined, read the Credit Cards Award Methodology 2021.
Cover image source: Jacob Lund/Shutterstock.com