Since I tend to get a lot of questions in my inbox and search hits from Google on building credit and opening credit cards I’m going to be talking about it a lot this month. I’ve already answered a reader question on credit and I’ll be discussing my latest round of credit card applications(5 for 5!) in the next couple weeks. Today, I have an interview with Andrew Boyd who runs a credit card comparison site.
Tell us a bit about yourself?
My name is Andrew Boyd. I live in the UK and co-founded CreditCardCompare.com.au, an Australian credit card comparison website, along with my brother David who emigrated to Australia a number of years ago. I have a background in digital marketing (both search and social), which has come in handy in the promotion of my business.
Credit card comparison websites are a dime a dozen, even in Australia. What is it that sets yours apart?
You’re right. There’s no shortage of credit card comparison websites, particularly in the USA, UK and Australian markets. You’d be deluding yourself if you thought you could open another, spend a bit of time writing some reviews, throw some links at it and reap your rewards. It’s not like that. Google isn’t the biggest fan of affiliates, so you’ve got to add value. In our case, we’ve got a blog, a learning center, and a suite of tools designed to make it easier for customers to make an informed decision. This is on top of over one hundred individual card reviews and comparison tables, which are maintained on a daily basis.
What is the main difference between the Australian market and here in the USA?
To put it simply, interest rates are the main difference. What looks like a good credit card interest rate in Australia would be considered laughable in the USA. It’s even worse if you compare Australian interest rates against the leading offers in the UK. As an example, take the ten cards listed on my balance transfer page. As of right now, only half of them have a 0% introductory offer. The rest have balance transfer deals in-between 2.99% and 4.99%. In the US, such deals are so uncompetitive that they wouldn’t be taken seriously. In Australia, they’re very common. Having said that, most Australian banks do not charge an admin fee on balance transfers, which can save a consumer a lot of money compared to the 2-3% fee levied on American and British consumers.
But there must also be similarities?
Yes, there are. The popularity of balance transfers as a means to get out of debt faster is as strong in Australia as it is in the USA. As are ‘instant approval’ cards (although these aren’t really instant approval – instant decision would be a better description). Most months, those are the highest trafficked pages on our site.
Australian consumers might like cheap interest, but they also like rewards. Frequent flyer cards, especially those linked with Qantas (the national flag carrier) and Virgin Australia (Richard Branson’s airline), are perennial favorites. Look at a map and you can very quickly appreciate their popularity – Australia is isolated geographically. It’s not like Europe where you can drive from one country to another with relative ease, so if an Australian needs to go somewhere, they’re probably going to need to fly.
What are the trends?
The cost of living in Australia has been growing steadily for years. What was once an affordable place to live is now hideously expensive. The fact that two Australian cities, Sydney and Melbourne, now rank among the top ten most expensive places to live is evidence of this. This is influencing consumer choices. Firstly, interest rates are more important than ever before. Secondly, balance transfers, at least on our site, are gaining in popularity. Thirdly, banks are having to compete more in order to attract increasingly cautious customers, although in Australia ‘The Big Four’ banks own many of the smaller banking brands, so the market is fairly sewn up.
Lastly, give us your tips on using credit cards effectively.
Track All Your Accounts With Personal Capital
Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.Keep things as simple as possible. Although some rewards hackers do this to take advantage of sign up bonuses, try to avoid opening lots of new credit card accounts. Pay your balance off every month in full – if you can’t afford it, don’t buy it. Take a note of when your card’s introductory offer expires, be that for a balance transfer or interest free purchases, and shop around to see if there’s something better out there.
Interesting. I always wondered how these companies deal with the conflict of interest of — perhaps — some companies offering better affiliate rewards, but not having the best terms on their cards.
I think the whole industry is sort of one big conflict of interest haha. They entice all their consumers with great offers, then hit you with fees, transfer fees and interest fees. I will never understand why so many people carry a balance.
I have a balance, but it’s at 0% for another several months and I’ll be looking to roll it over to another 0 when that comes up. For me, it was longer-than-expected underemployment & depressed rental income, both tied to the financial crisis.
I can’t say what others in the industry do, but I know that on our website, we don’t manipulate comparison tables based on payouts.
You are right interest rates are what most look at when looking to sign up for a credit card.0% balance transfers are hot for those moving debt around. Others look for the perks. The other day we were asked if we wanted to sign up for a credit card when we walked into a shop. We already had the shops credit card. She told us great if you fill out this credit card form again you get $20 and just discard the card when you get it. I asked, are you doing a credit check. She said yes! I walked away….informed customer! Always do your ressearch.
Haha $20?! What a rip off, I only sign up for cards with $400 cash bonus or 50k points. Might as well take advantage of these offers if you’re a responsible credit user.
You are right to be conservative. Stores push their co-branded credit cards in Australia just as much, and quite often they are so uncompetitive in comparison to others. I must admit that I do find sign up bonuses very interesting though – when you can earn 50,000 points and get a complimentary ticket each year, it’s quite compelling if you play the points game.