We thought we should take a peek at our cousins across the pond in Australia to see how their credit cards stack up against ours. After all, New Zealand and Australia share a lot in common due to our proximity and common heritage.
We set out to look at key differences in the credit card market focusing mainly on: the level of competition, purchase rates, balance transfer offers, interest free offers, rewards programs and credit card fees. Below are our findings.
The first thing that struck us was the level of competition in Australia compared to New Zealand – Australia has 3 times or more credit card providers than New Zealand. This is partly due to Australia having more banks than NZ, but largely due to the number of stores, airlines and unions offering credit cards in Australia. There is a similar trend in New Zealand with a few stores now offering their own credit cards, but not nearly as prominent as it is in Australia.
The good news for us is that as more New Zealand businesses begin to offer their own credit cards, we can expect the quality of offers to improve in NZ
The purchase rates between New Zealand and Australia were similar on the higher end of the scale, but when we looked specifically at low interest rate credit card offers, we found purchase rates as low as 9.90% in Australia compared to 13.45% in New Zealand. Interestingly, the minimum purchase rate for Westpac credit cards in Australia is currently 9.90% while the minimum purchase rate for Westpac credit cards in New Zealand is 13.45%. The same applies to ANZ in which the lowest purchase rate is 11.49% in Australia and 13.90% in New Zealand.
Sadly, it seems that when it comes to purchasing rates, we are getting a bad deal compared to the Australians.
Balance Transfer offers:
When it comes to balance transfer offers, Australia blows New Zealand out of the water with many providers offering 0% for 24 months whereas the best 0% balance transfer credit card you can get in New Zealand as at the time of this writing is 0% for 12 months.
Interest Free offers:
For those who are not aware what an interest free credit card is, interest free credit cards are credit cards that offer 0% interest rate on purchases for the initial period. These interest free offers are usually only for 6 months. Interest free credit cards are great if you want to make a big purchase and pay it back gradually over the initial interest free period.
Unfortunately, there aren’t many of these types of credit cards in both New Zealand and Australia although Australia more of these than New Zealand. An example of this is in New Zealand is the American Express Airpoints Card which offers 0% for 6 months.
Rewards credit cards were a bit harder to compare. Australia has a lot more rewards programs due to the sheer number of credit card providers, and more Australian credit cards have signup bonus points.
Credit Cards Fees:
The credit card fees were very similar between New Zealand and Australia. Both New Zealand and Australia have a few free credit cards i.e. no-annual fee credit cards
It seems Australians are getting a better deal when it comes to credit cards and we can only put it down to the level of competition in Australian compared to New Zealand. The good news is that with more Kiwi businesses venture into the credit cards space we should expect to see better credit card offers introduced in New Zealand in the coming years.