We're thinking of starting the 'Worst Credit Card Website' awards. Westpac would be a shoe in for 'Most Frequent Timeouts'. Suncorp would get a special mention in the 'Best Use of Tiny Text to Conceal Important Terms and Conditions' category. But HSBC would be the inaugural winner.
Seriously HSBC: heuristics. The product page for the HSBC Classic contains almost no information. You need to go into comparison table to get irrelevant little details like the interest rate. A rewards program is mentioned, but neither the product page nor the comparison table detail the earn rate (it's one point per dollar spent if you're wondering).
When you do locate the rewards section, it opens in a new window and you have to go into the FAQs to find the earn rate, capping and expiry information. Here's a tip HSBC: a question is only 'frequently asked' if people frequently need to know it and it frequently can't be found anywhere else on your website.
But we got there in the end and once you build a complete picture of the HSBC Classic, you begin to feel that maybe all that obfuscation was intentional.
The interest rate is 19.99% and the cash rate is 21.25%. That should ring alarm bells straight away. Only platinum cards can get away with rates that high.
The annual fee is $59, which is OK for a no-frills/mid-range card, but not great.
There is the obligatory balance transfer offer of 5.99% for six months, but after the expiration of the period, any remaining balances revert to the cash rate of 21.25%. There is also an interest free period of 55 days.
Compare all of that to the Classic’s sister card, the
HSBC Credit Card (formerly the HSBC Low Rate Visa) which has a much lower interest rate (15.99%), a lower annual fee ($49) and a lower cash rate (19.99%). In fact, the Classic does everything worse than its 'low-end' sibling, except it offers a rewards program.
Don't get us wrong, the rewards program is quite good. When we compared twenty-two Australian reward programs it faired quite well, particularly on cash back rebates. You'll earn one point per dollar spent, up to 100,000 points per year and points expire after 3 years. You can redeem your points on merchandise, travel etc and the redemption rate is quite good. A $100 department store voucher requires 16,600 points.
But it simply doesn't justify all those additional costs.
Let's do a quick study: on a $3,000 balance (about the average Australian credit card balance according to the RBA), how much will you pay over twelve months on the Classic compared to the HSBC Credit Card?
On the HSBC Credit Card, the first 55 days are free, after which you'll pay 15.99%. There is also a $49 annual fee. This equates to $407.42 interest, plus the $49 annual fee, totalling $456.42.
On the Classic, the first 55 days are interest free, after which you'll pay 19.99%. Over the year, you'll pay $509.33 in interest, plus the $59 annual fee, totalling $568.33.
On a $3,000 balance, that rewards program would cost you an additional $111.91. Of course, this exercise is entirely academic. There are a number of other factors such as when interest is calculated, repayments, fees etc, but it's an interesting guide. It's also worth noting that we didn't include the effects of cash advances or balance transfers and at 21.25% (one of the highest cash rates we've seen) they're likely to have an overall negative effect.
Bottom line: just what was this card trying to be? It's like a no-frills card with the core features of a poor platinum and a rewards program slapped on for good measure. Almost every consumer will find a more appropriate credit card elsewhere.
