CREDIT CARD ISSUER OF THE YEAR COLES

Low rate, extra interest-free days and shopper rewards are among the benefits

Once again Coles has taken out our award for Credit Card Issuer of the Year, having won last year for the first time. When searching for a winner, Joshua Sale, research analyst at Canstar, says it was looking for a well-rounded provider that could meet a wide range of customer expectations. After all, there are many different reasons you might want a credit card so it’s hard to find a one-size-fits-all provider.

“In this space, there are a number of institutions that offer competitive products for low-rate, lowfee, premium or rewards cards. However, very few are able to compete in all of these areas,” says Sale. “Coles represents the institution that has performed well across all of the profiles.”

Coles’s low-rate card offers customers a competitive purchase rate of 12.99%pa. It’s interesting to note that while home loan rates and rates on cash accounts have plummeted in line with the official cash rate (currently 1.5%), credit card purchase rates are at the same levels as they were in 2011. It’s made credit card debt comparatively more expensive than other types of debt, so a quality low-rate version is a great choice if you rely on your card.

This card also offers up to 62 interest-free days when you pay off your balance in full each month. Most cards usually offer around 55 days so you’ve got an extra week for greater budget flexibility.

All of Coles’s credit cards are linked to the Coles flybuys shopper rewards program, which allows you to accrue points on your shopping using your credit card. Both the no-annual-fee and lowrate cards earn one flybuys point per $1 spent on eligible purchases, while the Rewards MasterCard offers two points per $1. Coles is also currently offering new credit card holders $100 off a single Coles shop when they make their first purchase (within 30 days of credit card approval). But you’ll have to be quick, as the offer ends on June 30.

Credit cards spent some time under the microscope this financial year, with the Reserve Bank cracking down on surcharges. Interchange fee caps will be introduced on July 1 in an attempt to reduce excessive credit card surcharging. Credit card providers rely on interchange fees to offer customers high-value rewards, so in anticipation of the changes several cards already have slashed their rewards value.

If you’ve got a rewards card, it’s a great time to reassess your card’s value and make sure you’re really getting bang for your buck.

Our runner-up, American Express, certainly is a strong performer in this area, with Canstar commending the provider for its frequent flyer cards and rewards cards.

“American Express performs best for their rewards program, which offers consumers both high earn rates and transfer partners to a number of airlines at favourable conversion rates,” says Sale. Commonwealth Bank comes in third with high-value rewards cards and a low-rate gold card upgrade that offers customers complimentary international travel insurance, and extra warranty and security insurance on purchases. For a fairly low annual fee of $59, the Awards credit card pays a generous 1.5 points per $1 which can be redeemed at Myer or at Flight Centre for travel bookings.