The credit card market is fiercely competitive, but lenders are battling it out on reward and loyalty features rather than interest rates.
A senate inquiry has found that competition is generally more intense on less important card features, such as rewards and transfer programs.
The Senate Economic References Committee’s report released prior to Christmas says consumer inertia means many people have the wrong product for their needs and often don’t know the interest rate they are paying.
Generous tax benefits for superannuation and limited controls on contributions both magnify how the system works against women, researchers at Curtin University have told the Senate inquiry into economic security for women in retirement.
High-income earners and people with flexible assets that can be moved into super benefit from the structure of superannuation, say researchers from Curtin’s Women in Social and Economic Research (WISER) unit.
“Because women are underrepresented in these groups, they receive a relative small share of the benefits of the increasingly large tax expenditures on superannuation.”
The pot of money in a self-managed super fund (SMSF) is a too big a temptation for some when they’re under financial stress.
Case law is building, as the tax office gets tougher on people who breach the strict rules on how superannuation may be managed and invested.
The Australian Taxation Office (ATO) is winding up SMSFs, taking trustees to court and seeking a range of orders.
There is plenty of competition in the credit card market and consumers should shop around, Reserve Bank of Australia (RBA) Assistant Governor Dr Malcolm Edey has told a senate inquiry into credit card interest rates.
But the RBA says card interest rates remain “sticky”.
Rates vary widely and some are higher than “can easily be explained”, Dr Edey told the Economic References Committee public hearing on August 27.
Rates can be as high as 20% and the average is 17%, which would give card issuers an interest margin of 10% above their funding costs and losses.