The directors of small banks, credit unions and building societies must be confused. They continue to offer affordable banking products in the face of a global financial meltdown. Haven't they heard? Credit is significantly more expensive to obtain now, therefore all banks must raise their interest rates. Commonwealth said so.
It will come as no surprise to many readers (particularly those in Victoria) that the Members Equity MasterCard is a cheap, no-frills card. This is a bank directed by Bernie Fraser, the cyborg on the superannuation averts (seriously, have you seen that guy? he could put an insomniac crack-addict to sleep).
The card has a purchase rate of 10.99%, the second lowest on our comparison table behind the
Bankwest Lite MasterCard on 10.75%. That 0.24% difference equates to about $7.20 per year on a $3,000 balance. The cash rate is never explicitly mentioned on the bank's website, although you will incur a $1.25 cash advance fee if you use an ME or Westpac branded ATM.
The annual fee ($39) is lower than any of the other four sub-11% credit cards (
Bankwest Lite Mastercard,
St George Vertigo MasterCard,
Citibank Clear Platinum and
NAB Low Rate Visa) currently on our table (most are around $55), although it's worth noting that one of those four has a rewards program and another has travel insurance.
Perhaps the only negative is the short interest free period. The other four sub-11% cards all offer 55 days interest free, while the Members Equity MasterCard offers only 44 days. On a $3,000 purchase, you'll pay an additional $9.93 in interest over those 11 additional days. Obviously the difference is nil if you repay your purchases prior to the expiry of the interest free period.
It's worth noting that the card also comes with eight free additional cardholders. Most no-frills cards come with none and many cards charge an additional per-card fee.
The verdict: a very cheap card, but you'll need to make your own judgement about the trade-off between a lower annual fee and a shorter interest free period. Although Members Equity has an agreement with Westpac regarding the use of their ATMs, they're still a small bank, which seems to deter many consumers.
