Shop Till You Drop For The Right Low-rate Card For You

The Age

Saturday February 4, 2006

By ORIETTA GUERRERA

MAJOR banks are being given a run for their money, with credit unions and smaller banks shaking up the credit card market by launching some of the most affordable cards on offer.

With concern mounting over the ballooning indebtedness of Australian consumers, new "no-frills" cards boasting interest rates well below the average 16.75 per cent a year have flooded the market.

About 15 new credit cards were launched last year, including six no-frills cards.

In a list of the top 10 credit cards sorted by interest rate (compiled for The Age this week by independent financial research group Cannex) only two are offered by major banks.

At No. 1 is BankWest's Lite Mastercard, launched this week, with a 8.99 per cent rate, 25 interest-free days, and a $49 annual fee.

But consumers are being warned to shop around for the best card for their spending habits. For example, BankWest's new card charges 19.99 per cent for cash advances.

For consumers carrying debt from month to month, low interest rates and fees were important, but for those repaying each month, more interest-free days, low fees and reward schemes were the way to go.

Australian Consumers Association's Nick Coates warned consumers against accepting a card that did not require them to get a credit check first.