Defined Terms and Documents       

Credit Card Products means as evidenced in Balance Transfer Interest Free Period Offers and below, Credit Cards, under either of the two Credit Card Payment Schemes, are the most differentiated product (in both both 'variety of types' and 'quantum of providers') in the entire Western World as evident from the plethora of types listed further below.  Money lenders in the 21st Century, as likely in the 1st Century, focus on one or more promoted benefits, but often mislead with regard to the material hidden cost/s (interest and fees).

Australian Bankers Association response to the Inquiry into credit card interest rates - 2015 noted that "The credit card market is very competitive with at least 70 different providers and 200 different products." 

 

Below are extracts from the Productivity Commission's Draft Report titled "Competition in the Australian Financial System" dated Jan 2018 - 401 pgs - accessible at Competition in the Australian Financial System:

·           The institutional responsibility in the financial system for supporting competition is loosely shared across APRA, the RBA, ASIC and the ACCC. In a system where all are somewhat responsible, it is inevitable that (at important times) none are.

"Rather, we need: regulatory settings that do not thwart competition between existing institutions; more customer-oriented providers that consider their existing customers (not just potential new customers); less of a blizzard of new, but barely-distinguishable products with labels that obfuscate; much better and far more open information on product prices and conditions; and scope for consumers to more easily become unstuck (should they wish to be) from their current banks and insurers."

 

70.19% of Australian adults owned a credit card as at 2018 -

(a)        with an annual fee from Nil up to $700 pa for Citi Prestige Visa Card - invariably a tax deduction - (offering a welter of 'goodies' including 70,000 bonus Reward Points and 2 Reward Points per dollar spent - the American Express Platinum Business Charge Card costs a whopping $1,500 annually fee because it provides 100,000 bonus Membership Reward Points if the cardholder spends $5,000 in initial 3 months) - see below advertisement;

(b)        where the Credit Cardholder might Forfeit Interest Free Period And Pay Interest On Each Purchase From The Purchase Date for three months if repayment of the monthly Total Amount Owing is "a day late or a dollar short", whereupon the applicable Interest Rate is applied from the date of each Purchase during the previous month and the Interest Free Period is cancelled for the following two months;

(c)        complimentary travel insurance;
(d)        zero interest balance transfer for up to two years - but read the fine print, and then read it again;

(e)        Reward Points;

(f)         may receive a waived annual fee for the first year; and

(g)        frequent-flyer points.

Citi Select Premium Credit Card grants 70,000 'bonus reward points' and a welter of income tax avoidance gifts and charges an annual fee of $700 - likely an annual company expense.

Product Differentiation is a fundamental of micro-economics - making a homologous product (low barriers to entry) different from your competitors' similar homologous product to attract sales.  (c) to (g) above is a shining example of Product Differentiation for the 'core purpose' of the humble plastic namely a quick swipe to establishes the Purchaser's 'ability-to-pay' to pay:

  1. Low Annual Fee Credit Cards ranging from around AUD24 to AUD1,200 per annum

  2. Lower Interest Rate Credit Cards

  3. Lower Interest Rate Credit Cards with interest charged from the date of Purchase etc

  4. Longest Interest Free Period Credit Cards

  5. Loyalty Reward Points Credit Cards up to 2½ points per dollar spent and/or frequent flyer points

  6. Gold cards, Platinum cards etc

  7. Balance Transfer Interest-Free Period Cards

Credit Card Types  -  Finder lists the below nine categories:

1.      No annual fee credit cards

2.      Low interest rate credit cards

3.      Balance transfer credit cards

4.      Rewards credit cards

5.      Frequent flyer credit cards

6.      Gold, platinum and black cards

7.      Student credit cards

8.      Business credit cards

9.      Travel credit cards

Credit Card Products  -  Finder lists over 80 different Credit Card Issuers.

According to CANSTAR data cited by Westpac, Submission 21, p. 3, as at July 2015, there were at least 83 institutions offering 266 credit card products.

Comparing the various types of credit cards lists the below 12 categories:

  1. Balance transfer

  2. Low interest

  3. Cash back

  4. Reward points

  5. Hotel and travel points

  6. Retail rewards

  7. Gas points

  8. Airline miles

  9. Secured

  10. Prepaid

  11. Business

  12. Student

Credit Card Types  (234)

 

Below is an extract from Balance Transfer Interest Free Period Offers that evidences the proliferation of 'lure' Balance Transfer Credit Cards:

"Below are three Google threads for webpages that have since been amended to remove reference to the number of different types of Balance Transfer Credit Cards, but the number of alleged Balance Transfer Credit Cards, namely 113 and 106 different cards still appear in the below threads.

"

Companion Cards - "Shake Up Australian Card Market".