In a move that will shake up the New Zealand credit card market, Kiwibank today announced it will reduce the interest rates on its range of low rate credit cards.
For the first time, its lowest credit card rate is dipping below 10% and is likely to set a new benchmark low in the market.
The Low Rate card will sit at just 9.95% p.a. for purchases and cash advances and the annual fee has also been reduced to $30 p.a. from $48 p.a.
“This is the first time in many years that there’s been a significant change to credit card interest rates,” Kiwibank Chief Marketing Officer Mark Wilkshire said.
The last major change was when Kiwibank introduced the first low rate product into the market in 2002.
“With interest rates at an all-time low, reducing rates on our low rate cards is the right thing to do. This will help many of our customers, and it’s one of the many ways in which we’re committed to helping make Kiwis better off” said Mr Wilkshire.
The reduced rates apply to Kiwibank’s range of low rate credit cards from July 2019, for existing customers as well as new customers.
For customers who already have a low rate credit card, any interest charged on statements issued from July onwards will be applied at these new interest rates.
Kiwibank also announced today that it’s entering into a new, exclusive partnership with Visa to provide both its credit and debit cards.
“We believe that teaming up with Visa will allow us to deliver better innovation to Kiwis in the future” Mr Wilkshire said.
Kiwibank’s range of low rate Visa cards, which includes a new Platinum Visa, feature fresh, new native bird designs.
Customers can apply for a Visa credit card from 1 July 2019.
Existing customers do not need to do anything just yet. During the next 12 months they will be switched to a Kiwibank Visa credit card and will hear directly from Kiwibank a few weeks before receiving their new card.
Media enquiries contact: Lisa-Marie Richan - 027 475 3521
Where have the rates moved from?
- Low Rate purchase interest rate from 13.45% p.a. to 9.95% p.a.
- Low Rate cash interest rate from 22.95% p.a. to 9.95% p.a.
- Zero purchase interest rate from 16.90% p.a.to 13.95% p.a.
- Zero cash interest rate from 22.95% p.a. to 13.95% p.a.
- Gold purchase interest rate from 17.90% p.a. to 13.95% p.a.
- Gold cash interest rate from 22.95% p.a. to 13.95% p.a.
What are the new card designs?
Why the change on these products and not others?
We believe reducing the interest rates on our low rate credit cards will make the biggest difference for everyday Kiwis, so we’ve started with these.
What is new, first, unique about who we are and what we are doing?
This is New Zealand’s most significant change to credit card interest rates and pricing since Kiwibank introduced the first low rate product to market in 2002.
How are credit cards at all about making anyone better off?
The benefit of a credit card is to use as short-term credit. It is unsecured so riskier and the reason interest rates are higher. With these lower interest rates, the cost of short-term credit is reduced giving our customers more options and a better chance of reducing their debt.
Why do we need to do it?
With interest rates at an all-time low it’s the right thing to do. Kiwibank is committed to be the better banking alternative, a bank that provides real value for money, and that has Kiwi values at heart.