New credit card rating service

Thursday 12th August 2004

With New Zealanders paying $500 million to their credit cards each year in interest payments alone, the convenience of using a credit card is costing cardholders many tens of millions of
dollars a year more than it need do.

This according to CardWatch, a free ground-breaking new credit card research and ratings service launched today by FundSource, the investment research company.

CardWatch General Manager Tim Anderson says that if card holders had been able to compare credit card rates and features and shopped around, last year alone they could have saved more than one third of their card costs or some $200 million dollars in interest payments.

CardWatch aims to allow consumers to do just that.

CardWatch will rate all major credit cards issued in New Zealand by measuring their relative benefits and costs. Even the worth or otherwise of rewards programmes attached to cards are
calculated into the rankings, as are fees, interest rates, interest free periods and the card's currency conversion rate for overseas transactions.

Tim Anderson said the credit card business in New Zealand was now huge. In the year to June 30 more than $20.5 billion was spent on credit cards in New Zealand, which is almost two and a half times or $12 billion more than the same period 5 years ago. In June this year alone $1.78 billion was swiped on to the 2.4 million credit cards on issue.

The average New Zealander has just over $1,600 outstanding on their credit card every month, while spending just over $700 in the same period.

"Just a slight difference in interest rate or relative value in rewards programme, even card fees, could make a substantial difference in costs to a card user annually and an even more
marked impact over a lifetime of use," Anderson said.

"With CardWatch, cardholders can now compare products and look for that advantage".

CardWatch calculates ratings for two different usage patterns, one for the person who pays off their card in full each month and another for those who carry forward an outstanding balance.

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