the mozo blog

As winter dies and the stress of losing weight for summer sets in, spare a thought for credit cards that have gorged for months and are entirely unfit for the christmas binge. Now’s the time to think about a balance transfer.

Since you’re a clever sort, you’ll be ogling those super-slim interest rates on Mozo’s credit card comparison page — and hey, who hasn’t snuck a glance at a lusty 0% balance transfer rate? But here’s the rub: that low interest rate could end up costing you money.

“Zounds,” you might reply, and return to your ogling, but bear with us. We’ve been having a bit of a play with our nifty credit card calculator, which spits out the actual cost of a credit card — in place of all this interest rate and balance transfer malarky. The cost is the total you’ll pay in interest and fees to kill off that debt, and as it happens, it’s the best way to judge a credit card.

So let’s peek beneath the balance transfer covers.

• Citibank’s Clear Card, for example, offers a 0% for 6 months on balance transfers — and a stupendous purchase rate of 11.99% for 12 months. However, if you don’t pay off the transfer within that time, the balance reverts to a corpulent 21.24%.

  For a debt of $3000, with repayments of $200 monthly, you’re looking at a cost of $308 in fees and interest.

• Suncorp’s Clear Options Standard credit card, by contrast, offers 1.9% for 12 months, and then 17.99% on the outstanding balance transferred. Punch in the same numbers, and the cost of knocking off that same debt is only $135.

  The difference is, well, clear.

• St George’s Vertigo credit card has a lousier balance transfer offer still, at 2.99% for 6 months. However, after 6 months any unpaid balance doesn’t revert to a sky-high cash rate, but to a quite lovely purchase rate of 12.49%.

  So what does that all mean? The same debt, with the same repayments, will cost $252 to pay off with St George.

And if, ahem, your repayments drop to only $100 each month, while that debt blows out to $5000, here’s the cost of each balance transfer in fees and interest:

Citibank Clear Card: $4639

SunCorp Clear Options Standard: $2304

St George Vertigo: $1974

The conclusion? Pay of that balance ASAP! But if that isn’t feasible, don’t just grab the best headline rate: it could be twice as expensive.

What’s the real cost of frequent flyer miles or cashback points using a rewards credit card?

We’ve all fallen for the promise of free, see-through kitchen scales paid for by credit card rewards points, magical points. Because, let’s face it, we all know the allure of something for nothing, whereas the exchange rates for credit spend, points earned and rewards purchased are anything but transparent. So are you getting value for rewards points?

On behalf of everyone whose free return flight to Dubai is looking more like Dubbo, Mozo has cracked the rewards credit card code, to reveal the true value of all those points, cashback deals and discount programs.

The results are kinda scary, so deep breath.

We thought the main difference between the 100-plus different rewards credit cards would be how many toasters / flights / gift cards you get for your annual credit spend. But in many cases, the points expire before you can cash them in, or the rewards offered takes years to attain; worse still, the value of rewards earned is often less than the annual fee.

So how do you beat the rewards card market? Well, it all depends on your credit card spend — but our new Rewards Revealer lets you plug in your numbers for a personal solution. And you’ll find the results are wildly different for flights, giftcards and cashback offers.

If you spend $15,000 a year, the best rewards cards (determined by the value of rewards minus annual fees) are:

for gift cards: Myer Visa Card — $111
for cashback: American Express Blue Sky Credit Card — $103
for domestic flights: Jetstar Mastercard — $101
for international flights: Westpac Earth — $100

Whereas for $50,000 a year, it’s a completely different story:

for international flights: Citi Emirates Platinum — $1,021
for domestic flights: Jetstar Platinum Mastercard — $851
for gift cards: ANZ Rewards Gold — $621
for cashback: Westpac Altitude Platinum — $603

Remember, the interest rates on rewards credit cards nudge up to an outrageous 20%, so unless you pay off the whole balance every month, you’re unlikely to benefit from a rewards card.

Why not check out where your credit card ranks, or who gives you the most covetable appliances a year?

Get to the points at http://mozo.com.au/credit-cards/rewards.

State against State. Mate against Mate. It’s a line that epitomises rugby league’s annual showcase of interstate rivalry, underscoring the passion and pride on display between the NSW cockroaches and the cane toads from Queensland. With rugby league’s annual State of Origin series now decided, it’s time to bring back the financial biff and pit the states head on!

Since Origin is about representing your state, community and people, we’ve decided to use what consumers have said about their banks hailing from each particular state to create an overall picture. So using the 30,000 bank reviews you’ve submitted, it’s time for Mozo’s annual ‘Rate of Origin’. State against state. Rate against rate.

With 7371 reviews behind them and big players like Westpac, Macquarie and St. George as well as no less than 4 credit unions on our list of the top 10 Australian banks in the side, NSW comes in as strong favourites. As always, Queensland are the underdogs, conceding a significant numerical advantage in both number of reviews (2416) and number of providers (10 to NSW’s 15). They’re led by Queensland stalwarts like Suncorp, Bank of Queensland and their sole representative in our top 10, CUA.

With the NSW camp already shattered and in turmoil after losing their fifth straight origin series, it will come as another body blow to the state and their footballers that NSW is getting dusted not only on the field but also in their wallets. NSW banks put up a solid if unspectacular average overall rating of 6.91, led by strong performances by Teachers Credit Union and the Greater Building Society. However, with old hands Suncorp and Bank of Queensland ably steering them round the park and strong efforts from CUA and Heritage Building Society, the banana benders have stormed home with an overall rating of 7.34 to claim the Origin title.

The real difference between the sides was the abject performance of Westpac, whose rating of 6.7 was the catalyst to NSW’s demise. If you remove Westpac from the equation, NSW’s rating rises to 7.25, a mere drop goal away from victory. NSW will be looking for Westpac to pick up their game over the next year to avoid the pain and humiliation of another Rate of Origin defeat.

So as the dust settles and the xxxx’s are cracked in bank head offices around Brisbane and wider Queensland after another fiery clash between these two interstate rivals, I implore all Origin fans out there to get behind your state and rate your bank to give your state a shot at Origin glory next year!

Reports of gale-force rate rises, massive savings swells and credit card downpours have hit across Australia.

So Mozo is introducing the country’s first bank-emergency response unit: the Mozo Rate Chasers. This crack team of field experts report back from the front line of finances to get you the latest on banking conditions: the lowest home loans amid a surge of rate rises; the best credit card deals as new providers blow in; the Noah’s Ark of term deposits as the savings flood sets in.

And as conditions intensify, Mozo HQ has upgraded to help navigate the bank storm, with even easier access to huge savings on credit cards and loans despite the treacherous conditions, as well as integrated reviews from real customers to give you eye-witness accounts of bank disasters and financial life-savers.

Check out the Rate Chasers in action.

Stay dry Mozonians!

A story came out this week that seemed 10 years too late – owing to a computer glitch, a sizeable number of Bank of Queensland and BankWest ATM and eftpos machines malfunctioned and stopped working. The reason? An internal clock in the devices ticked over to 2016 instead of 2010, thereby rendering any card with an expiry date earlier than 2016 out of date.

It was always a disappointment to me when the millennium rolled in and nothing happened. Kevin Costner had a large part to play in this, my desire to live in a barren post-apocalyptic wasteland piqued after watching Waterworld. I bought the canned goods and the bottled water. I sacrificed an entire summer’s worth of backyard cricket so I could construct a fallout shelter in the garden. So it was with glee and perhaps the tiniest glimmer of hope that I read about this latest development.

Were there irregularities in the time space continuum in Queensland and Western Australia? Should I be expecting a drive-by visit from a Delorean? More importantly, should I evict the 20 Israeli backpackers from my bomb shelter? They’ve been a real cash cow through the recession.

The whole saga got me thinking about what the world of banking will be like 6 years from now so I’ve constructed a basic timeline of events:

2011 – Gail Kelly becomes a blender jockey at her local Boost Juice after getting the heave-ho from Westpac on the back of a failure to glean a single home loan application in 2010.

2012 – In a bloody coup, the two American marketing gurus in the Commonwealth Bank ads take over the bank and install basketball hoops in branches and hand out money box transformers to kids, actually making going to the bank somewhat enjoyable. This popularity springboards them ahead of the competition and they take over an ailing Westpac, re-branding themselves as ‘Compac’.

2013 - NAB forced by the Australian government, led by a Hologram of the late John Howard, to annex ANZ when a financially crippled New Zealand becomes an Australian state (South Tasmania) and the unifying moniker of National Australia Bank was deemed to suffice for both.

2014 – Compac flourish for a couple of years till they are successfully sued for billions of dollars by American computer manufacturer ‘Compaq’ for copyright infringement. Daily Telegraph headline reports that the outcome has put the ‘Bank back into bankrupt’. Daily Telegraph headline writer fired.

2015 – With ‘Compac’ in dire straits, all their concerns are taken over by NAB. NAB renamed ‘The Bank’.

2016 - Nationwide backlash to what Howard labels a “perceived lack of competition”. Financial markets crippled as investors lose faith in “The Bank” after a 0.25% Reserve Bank increase is met with a 15% rise in the mortgage rate.

Year 0 – Former ANZ upper management turned radical New Zealand nationalists hacked into the software controlling the Howard hologram, and through a series of poorly thought out foreign policy moves, make North Korea unleash three nuclear warheads. Only those of us with fallout shelters remain. We have no oil or water, but luckily I have Gail Kelly with me to make me smoothies, fruit whips and juices. And there isn’t a financial institution in sight.

I guess the apocalypse ain’t so bad after all…

Compare banks with Mozo.com.au

It’s not yet been a week since Mozo’s VICE Presidential race kicked off, and already Australians have confessed to a quarter of a billion dollars worth of spending sins. Who knew you were all so profligate?

Well, we kinda suspected…

But the big surprise has been the vices themselves, with Gadgets taking the lead on $77 million, closely followed by Shoes & Clothes.

Seems we’re a nation of chic geeks.

So what ever happened to the party-hard Aussie yobbo? After a strong start, Booze has drooped to a groggy $15m, and Ciggies are only coughing up $4.5m.

Of course, it’s early days yet, and having stepped over more than one xmas reveller on the way to work this morning, Mozo thinks there are a few sinners holding out on us…

So pop an aspirin and join the race to become Australia’s first VICE President.
http://mozo.com.au/vice-calculator

That five grand – and limitless kudos – could be yours!

Dear Mozonians,

Do you know how much your Vices are costing you? If you’re anything like us, you’ve got no idea just how bad it is. All those coffees each week, the shoes clogging up your cupboard, the night on the drink that mysteriously drained your whole bank account – and let’s not even get started on Christmas and New Years.

Truly, we are a viceful people.

But here’s the good news: We’re looking for Australia’s First Vice President! That’s right, we’re going to reward the vices you try so desperately to hide!

Simply head to our Vice Calculator, tot up that vicious spend and come up with a campaign promise to smite your vice. The candidate with the best promise will win $5000!

Follow the campaign trail on Facebook and Twitter to read and vote on your rivals’ promises, and be sure to boost your supporter base — get your friends to vote for you.

The VICE President will be inaugurated on Australia Day — so join the race and start campaigning today!

Team Mozo

Electoral Regulator

You may have noticed there are more than the usual amount of Tom Selleck and David Boon lookalikes around town these days. This isn’t an 80′s flashback dream you’re having, it’s Movember, the time of year to celebrate the gift of upper lip facial hair. We here at Mozo think it’s about time we dropped the razor and kicked back for the month long “Mozotache Madness”. And to be honest, could we have asked to have a better name here at Mozo to support Movember?

So if anyone is feeling extra generous then perhaps you would like to make a donation to me and my team. We’re called “The Tom Selleck Fan Club” and you can donate via this link:

https://www.movember.com/au/donate/your-details/member_id/79844/

We’re all in it for the good of the cause, which is for prostate cancer and male depression. Plus, in the spirit of Mozo, the Movember people send you a nice little tax receipt for your tax deductions, helping you to save money off your tax bill at the end of the financial year!

So normally the Mozo Blog keeps you up to date with great deals, bank tricks and savvy financial moves. But today we wanted to tell you about a newly awarded tool that could save you a bunch — ourselves!
Abandoning our usual modesty for a moment, our Health Check feature was named a finalist for ‘Best Online Tool’ in the SmartCompany Web Awards. (Of course, we always suspected that Mozo’s unique facility to instantly compare your home loan or credit card with the rest of the market was pretty special.)

It confirms our place as Australia’s best website to help you through the money maze, saving you on fees and interest, as well as time.

So if you’re credit card or home loan is looking a little sick, give it an (awarded) Health Check! Let us crunch the numbers to see who’s the best performer for your personal financial situation.

See what all the hypes about: Health Check Your Credit Card, Health Check Your Home Loan, Health Check Your Personal Loan, Healh Check Your Car Loan.

I had to pinch myself yesterday as I absorbed the headline “John Symond defends banks’ decision to pocket rate cut”  (check it out, and the reactions, at Lending Central)

What the….? Is this THE John Symond. The world really has changed.

When John Symond starts defending the banks you know something is wrong. The problem is, there are no challenger brands left, at least not on the lending side. In recent years the most successful challenger brands in lending have been Aussie, Wizard and BankWest. They have connected with consumers in a way the old players just cannot do, and have brought really strong products to market. And surprise, surprise, all were successful in attracting large volumes of customers away from the big banks.

So how does Commonwealth Bank respond, by competing with them on product and marketing? No, they take them out of the market instead. They bought BankWest, bought a stake in Aussie, and Aussie bought Wizard and swiftly killed the brand entirely. So we wake up today with a very different world where competition in banking is just not what it was. And that’s bad news for consumers.

So essentially Commonwealth Bank is now left to develop products and marketing as they see fit. Here’s an example I just saw on a banner ad this morning - ”No annual fees forever on the Low Fee MasterCard. That wasn’t so hard, was it?”

No, it wasn’t hard at all. Which is why I want to know why it took so long to do it? The no annual fee ever promise has been in the market for 6 years.

But worse than that, let’s look behind the headline message and see what the offer really is. Clicking it takes you to a page which then says:

“No annual fee for Commonwealth Bank customers who take up a new Low Fee credit card and spend $1000 per year. Annual fee $24 for non-Commonwealth Bank customers”

So in fact it isn’t even a no annual fee forever card at all!! And why market something on a widely shown banner ad that is actually only available for your own customers?? And never mind the fact that the interest rate is 18.49%.

When product development and marketing is left in the hands of the big banks it’s not happy times for consumers unfortunately. Let’s hope some new challenger brands are on the horizon, because Australians need them.