Difference Between Banking in Australia and Banking in America

Are you under the impression that the banking and credit card industry in the United States is the same as Australia? It is an easy misconception to have, but when you start to look at the specifics, their rules and systems have a lot of major differences. Many people moving from the US to Australia make this mistake and soon realise that they need to adjust their financial plan.

On the surface, it is easy to believe that everything is the same. After all, many of the biggest financial institutions in the world issue credit cards to consumers in both countries. These banks include:

• HSBC
• Citibank

Remember, just because the name on the credit card is the same does not mean that the offer is identical. There are many differences between the two industries.

Major Differences

1. On average, Australia credit cards have a higher purchase rate. While not always true, this appears to be the case for the most part. Right now, the average interest rate on purchases is 16.63% in Australia.
2.  There are lower annual fees on Australian credit cards. This is a huge win for those who live in Australia. One of the primary drawbacks of applying for some credit cards is the annual fee. After all, who wants to pay a fee just to use a credit card? In Australia, this fee is often times lower than in the United States. You will soon find that a large number of offers have no annual fee at all. Even those that do typically don’t exceed much more than $50.
3. Balance transfer duration. This is something that Americans moving to Australia should be aware of. The balance transfer introductory rate duration is typically shorter in Australia. In the United States, finding a zero percent rate for 18 months is common. This is not generally true in Australia. Instead, the best offers will have 0 percent for nine months. Some don’t even offer that. Instead, you will be faced with a rate of 4.99 to 5.99 percent for a relatively short period of time – such as six to eight months.

Get Rewarded for Using your Credit Card

One feature that US and Australia credit cards share is high quality reward point programs. Both countries have many options for consumers who want to earn money for every dollar they spend. That being said, you cannot expect the reward program to work exactly the same in both countries.

Here are the details you must compare to ensure that you are 100 percent sure of what you are getting:

• The number of points that you earn for each dollar spent
• A list of what you can use your points for (travel, electronics, etc.)
• Expiration date

Application Requirements

Both countries offer a variety of credit card products. On the same token, the majority of banks in both countries share one thought: they want to do business with people who have good credit – this includes a solid history and better than average score.

The application requirements can and will differ depending on the country in which you live.

For example, there are more United States based credit cards for people with bad credit who are looking to get back on track.

On the other side of the globe, consumers in Australia typically find that the entry-level requirements – including age and salary – are more lenient.

Final Thoughts

As you can see by now, there are differences between banking/credit cards in Australia and the United States. Are any of these differences so in-depth and complicated that you will have a difficult time understanding them? Of course not.

Like anything that has to do with your finances, you need to know what is available and what exactly you are getting into. If you do your homework, you will have an easy time making the transition from one country to the other.