If you answered “don’t know” to the above question, you’re not alone.
An Essential Research survey commissioned by the Customer Owned Banking Association (COBA) found more than half of respondents used their credit card to buy Christmas presents. But, 46 per cent had no idea what interest rate they paid.
This leaves a lot of people open to a huge shock at about this time of year when they get their credit card bills.
COBA CEO Mark Degotardi said “consumers are clearly forking out much more than they need to. It’s worth digging a little deeper to make sure you’re getting the best deal on your credit card.”
The Essential Research poll found young Aussies think the big four banks offer the best rates, with 16 per cent of those aged 18-34 nominating the big four banks, compared to seven per cent of those aged 55 and over.
But the latest Canstar numbers show credit card interest rates from customer owned banks, building societies and credit unions are on average 4.99 per cent lower than the big four, who have an average rate of 18.06 per cent.
The survey also found:
– Australians buy seven Christmas presents and spend $570 on average
– More than a third describe paying for Christmas presents as “stressful”
– Sixty-five per cent don’t know who has the lowest credit card interest rates.
So this is why it pays to know your rate and shop around for a lower one. Because while gift-giving is often viewed as a generous, and necessary part of Christmas, it could be costing a lot more than the price tag you see in the shops.
Pic: Sean Macentee via Flickr.