A survey by Australia’s largest comparison site exclusively for credit cards, Credit Card Compare, has found that Australian consumers are far more discerning and less loyal when it comes to credit cards than most other categories of personal finance products or utilities.
Seventy-two per cent of credit card owners have considered switching providers in the last two years, and 67 per cent have shopped around for credit cards in the past two years.
This is compared to just 54 per cent for mobile phones, 42 per cent for health insurance, 40 per cent for electricity providers, 38 per cent for travel insurance, 37 per cent for broadband, 26 per cent for home loans, 16 per cent for personal loans, and 13 per cent for life insurance.
The reasons behind the ongoing pursuit of the “best” credit card deal were varied among respondents.
Expiration of an introductory offer was the most common reason cited for wanting to switch at 26 per cent, followed by avoidance of a looming annual fee at 25 per cent, and discovery that frequent flyer and reward points were getting low at 24 per cent.
Analysis of one’s personal finances through receipt of financial statements (2 per cent), tax returns (2 per cent), or on the advice of an accountant (1 per cent) were listed as the lowest drivers of consideration to switch.
“The reasons driving a switch are somewhat less encouraging,” continued David Boyd. “It appears Australians are more heavily motivated to switch by short-term gains or avoidance of one-off fees, as opposed to any type of long-term holistic assessment of finances or rewards.
“It’s also disappointing that the strategic or prudent use of credit cards is not being more heavily addressed by financial professionals, such as accountants.
“However, these results might also serve as a warning to credit card providers that attractive introductory offers may be effective at bringing customers in initially, but they do little in the way of retention. Once that initial sugar rush has worn off, customers appear to go searching for a new ‘hit’. And given the ease of switching, this may not be so hard to achieve,” concluded David Boyd.
The survey also uncovered that comparison sites significantly aided customers’ application and switching behaviour.
Thirty per cent of respondents used a comparison site “immediately” once they started thinking about switching, while 26 per cent chose a new card in just 1-3 days after using a site, and 24 per cent chose one in 3-7 days.
The most common reasons for choosing a card specifically from a comparison site included extra sign-up bonus points or cash (60 per cent), an easier or faster application process, and greater certainty that the application would be approved (both 28 per cent).
Only 11 per cent of respondents considered switching after seeing an offer from their internet banking, and just 4 per cent considered switching when receiving a sales letter or email from their banks.
For more information on Credit Card Compare: www.creditcardcompare.com.au
About Credit Card Compare
Credit Card Compare (www.creditcardcompare.com.au), is Australia's largest comparison site designed exclusively to help Australian consumers compare, research, and apply for credit cards. We help millions of Australians confidently select the most suitable credit card for their lifestyle and financial needs.
Founded in 2008 by brothers David and Andrew Boyd, Credit Card Compare remains independently co-owned by the two original founders to this day. It features data, calculators, tools and reports on 300+ cards from Australia’s largest banks and credit unions, and maintains a prime online ranking and share of voice in one of Australia’s most competitive online fields: comparison sites.