Rewards and travel credit cards typically come with higher interest rates and fees compared to standard credit cards, as these cards tend to offer more features, protections and rewards in the form of frequent flyer programs. 

However, consumer advocate CHOICE has called for the interest rates on these cards to be lowered in the wake of COVID-19. 

“While the banks’ response to customers affected by COVID-19 has been commendable to date, more work needs to be done to make credit cards fairer, especially frequent flyer cards,” CHOICE banking expert Patrick Veyret said. 

Virgin Velocity credit cards in particular were named and shamed by CHOICE.  

With most flights grounded and Virgin Australia itself going into voluntary administration, Virgin Velocity has placed significant restrictions on points redemption

According to Mr Veyret, the Velocity program being essentially frozen means the value of these points and cards remains in limbo. 

"It’s simply indefensible that banks continue to charge people interest rates in excess of 20% on Velocity frequent flyer cards," he said. 

"While the value of the Virgin program is in jeopardy, the interest rates on these credit cards must be capped at 10%."

CHOICE lists many Virgin Velocity-linked credit cards that are not currently available for new customers, but are still available for existing customers, that charge interest rates near or in excess of 20% p.a.

These cards, seen in the infographic above, also come with high annual fees. 

"There has been no relief for existing Virgin velocity credit card cardholders,” Mr Veyret said. 

“Banks market their rewards programs to lure people into purchasing expensive credit cards, often using the trap of 0% balance transfers. Banks justify their exorbitant interest rates and fees by pointing to perks like access to frequent flyer programs.

"However, a recent CHOICE investigation found that many frequent flyer credit cards are simply not worth it. This is even more so now with the future of the Virgin Velocity program under question."

CHOICE's invesigation is supported by previous research. 

According to a 2018 study released by the Reserve Bank of Australia (RBA), 30% of customers actually make a net loss on their credit card, and inappropriate rewards schemes are a major factor in this. 

The current financial climate has resulted in CHOICE's decision to call for a 10% p.a cap on credit card interest rates. 

“Velocity frequent flyer credit cards are simply the tip of the iceberg," Mr Veyret said. 

"The cash rate is at an historic low of 0.25%. There is no justification for the big banks to continue charging interest rates in excess of 20%.

"Interest rates on all credit cards must be capped at 10%."

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure

Savings Account

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Increase your balance by $200 each month to earn the maximum interest
  • No account keeping fees
  • No minimum balance
  • Interest paid monthly
Disclosure

Online Savings - Premium Saver

  • Increase your balance by $200 each month to earn the maximum interest
  • No account keeping fees
  • No minimum balance
  • Interest paid monthly
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure

Savings Maximiser

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure
020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

HomeME Savings Account (<$100k)

    02001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

    Growth Saver

      01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Virgin Money Boost Saver

        01001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

        Bonus Saver Account

          01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

          Bonus Saver

            0100$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

            mySaver

              000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

              Simple Saver

                4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                Netsave Account

                  3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                  Online Savings Account

                    3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                    HSBC Everyday Savings Account

                      0501$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                      Incentive Saver Account

                        4000.01$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                        Bankwest Easy Saver

                          0502$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                          Bonus Saver

                            000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
                            • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
                            • Retrace your spending steps into categories with Spending Footprint.
                            • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
                            • No monthly or international fees on any of your transactions.
                            Disclosure

                            Save Account

                            • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
                            • Retrace your spending steps into categories with Spending Footprint.
                            • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
                            • No monthly or international fees on any of your transactions.
                            Disclosure
                            0500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                            Incentive Saver Account

                              02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                              Growth Saver Account

                                Important Information and Comparison Rate Warning

                                All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of November 21, 2024. View disclaimer.

                                Important Information and Comparison Rate Warning

                                More to come...