Australia’s worst credit cards have been revealed, with one product charging 21 per cent interest and a whopping annual fee of $700.
Consumer group One Big Switch is warning Australians to stay away from high interest credit cards, which often come with buy now, pay later department and electronics store purchases.
The Reserve Bank of Australia on Tuesday cut interest rates to a new record low of 0.1 per cent.
Spend $1000 on this Citi Prestige card and if you only pay the minimum monthly repayment, after 12 months you’ll end up paying $932 in interest
The Latitude Gem Visa card (pictured) charges a $99 annual fee
While home borrowers are set to see their monthly repayments fall, the major banks and financial lenders will still have high interest credit cards.
The Citi Prestige credit card charges 21.49 per cent interest and an annual fee of $700.
A borrower who spends $1,000 but only makes minimum repayments after a year will owe $932 in interest and fees, to have a total bill of $972.
Westpac’s Altitude Black card charges 20.49 per cent interest per annum – the highest of the major banks – and levies a $250 annual fee
Rival ANZ’s Rewards Black has a 20.25 per cent interest rate and a $375 annual
Westpac now has a deal with Afterpay to link accounts and payments, but it still has a credit card with some nasty fees.
Its Altitude Black card charges 20.49 per cent interest per annum – the highest of the major banks – and levies a $250 annual fee.
Rival ANZ’s Rewards Black has a 20.25 per cent interest rate and a $375 annual.
Australia’s priciest credit cards
Latitude Gem Visa: 24.99 per cent per annum and $99 annual fee
Skye Mastercard: 23.99 per cent
Citi Prestige: 21.49 per cent per annum and $700 annual fee
American Express Explorer: 20.74 per cent per annum and $395 annual fee
Westpac Altitude Black: 20.49 per cent and $250 annual fee
ANZ Rewards Black: 20.25 per cent and $375 annual fee
Customers who spent $1,000 but only make the minimum monthly repayment end up paying $594 in interest after 12 months and still owe $959 on the card.
The Latitude Gem Visa credit card charges and annual interest rate of 24.99 per cent and even if you don’t spend a cent, there’s a $99 annual fee.
This card offers six months interest free on items selling for more than $250 but it comes with a $30 late fee.
The American Express Explorer charges 20.74 per cent a year and has an annual fee of $395.
David Liston, One Big Switch’s campaign director, said the big banks were now trying to cash in on buy now, pay later credit cards and apps, like Afterpay.
‘Young people see buy now, pay later as a far superior option and the banks are nervous,’ he said.
Mr Liston said a $1,000 credit card bill left unpaid would incur a $2,168.
Clueless consumers are being urged to heed the advice of Nobel Prize winning German physicist Albert Einstein who said: ‘Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t pays it.’