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Which credit card for you?

Financial institutions are using unfair practices to squeeze every last cent of interest from customers.
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01.Stings in the tail


Most CHOICE members pay their credit card bill on time and in full each month, avoiding interest and fees. From time to time, many of us slip up. Who hasn’t at one time forgotten to clear their bill by the due date, or misread a statement and paid the wrong amount?

It’s for these simple mistakes consumers with impeccable repayment records are being slugged with penalty interest. It’s not just a card’s interest rate that determines what you’ll pay; the amount you’re charged depends on when your card provider starts and stops charging interest and how fairly they apply interest-free periods. You could have two cards with exactly the same interest rate and use them in exactly the same way, yet one may end up charging twice as much interest as the other if you pay late. In fact, depending on your spending and repayment patterns, the difference could be much greater – as this report's case study explains.

CHOICE surveyed more than 20 credit card providers to find out how they apply interest when customers occasionally pay late or not in full. All the big guns provided information and calculations, as well as some smaller financial institutions. For those who always pay their bill on time, or for cardholders who are struggling with a recurring debt, see Picking the best card for our recommendations.

Credit card providers tested

  • Australian Central Credit Union
  • American Express
  • ANZ
  • Bank of Queensland
  • Bankwest
  • Bendigo Bank
  • Citibank
  • Commonwealth Bank
  • CUA
  • GE Money (Myer Visa and Low Rate MasterCard)
  • Heritage Building Society
  • HSBC Australia
  • IMB
  • Macquarie Bank
  • Members Equity
  • NAB
  • Savings & Loans Credit Union
  • St George Bank
  • Suncorp Metway
  • Teachers Credit Union
  • Westpac
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