Research Finds Major Inconsistencies In Credit Card Fee Spend Across Australia

In early 2017, Pocketbook, a zipMoney company, embarked on a six-month data analysis project to explore the anonymous spending habits of 59,600 Australian credit card users across 4,162,019 transactions and 19 financial institutions in Calendar Year 2016, curious as to whether they’d uncover any great disparities in credit card fee spend among regions.

The research

It is our understanding that there has never been an analysis of Australian credit card use to this level of detail – the closest being the Reserve Bank of Australia‘s annual report, “Banking Fees in Australia”. 

The research was undertaken as part of zipMoney’s mission to promote greater transparency around Australian consumer finance and encourage a more discerning use of credit among consumers.

The research focused on three key questions: Which Credit Card Fees Generate The Largest Revenue?;  Are There Gender Differences When It Comes To Credit Card Fee Spend?; and Are There Differences Across Geographies When It Comes To Credit Card Fee Spend? Additionally, we developed a case study that examined differences between thirteen Sydney suburbs.

The Findings

Nine fee types were analysed: Annual Fees, Cash Advance Fees, International Transaction Fees, Late Payment Fees, Over Limit Fees, Account Holding Fees, Transfer Fees, ATM fees, and Joint Card Fees.  

Question 1 – Which Credit Card Fees Generate The Largest Revenue?

Our initial hypothesis was that annual fees would represent the main revenue generators, but our research found that, in fact, cash advances and overseas usage are the real drivers of fee revenue.

Four fees accounted for 60% of revenue: international transactions (38.7%); cash advances (9.4%); late payment fees (8.2%); and over limit fees (4.6%).

Pocketbook’s analysis shows that of A$30 million credit card fees incurred on a weekly basis in Australia, $20 million of these are based on those four fee categories.

Total fee revenue Pocketbook credit card fee
Source: Pocketbook, ZipMoney, August 2017

Question 2 – Are There Gender Differences When It Comes To Credit Card Fee Spend?

While there is no shortage of studies and generalisations around the spending habits of males and females, to our knowledge no analysis has been conducted to the current level of detail and scope of credit card fee behaviour across genders.

Our research found few differences across most fee type spending when it came to gender.  However, while the average transactional fee spending is stable between the genders, the main disparity to emerge from the Pocketbook analysis is the average annual fee paid by males versus females. Men tend to pay an average of 18 per cent more on annual fees compared to their female counterparts.

The two key disparities to emerge were as follows;

Gender credit card fee
Source: Pocketbook, ZipMoney, August 2017

Pocketbook analysis looks at the fees only in this comparison and makes no assertions around discretionary spending patterns of men and women.  That said, the annual fee disparity could reflect men opting for more premium credit products which attract a higher annual fee. What’s more;

  • The average annual fee paid by women is $78, whereas for men it is $93
  • Women spent significantly less on transfer fees than men – $14.18 compared to $20.22. This is a fee for transferring between accounts (an example of which would be a balance transfer fee) and implies that men may transfer funds more frequently between accounts

Question 3 – Are There Differences Across Geographies When It Comes To Credit Card Fee Spend?

The answer to this question was a resounding “yes”.  In assessing credit card fees from a national perspective, an interesting contrast emerges between the states.

New South Wales and Western Australia lead the nation in credit card fees. The two pay significantly more in terms of annual fees compared to South Australia and Victoria.

Australia credit card fee
Source: Pocketbook, ZipMoney, August 2017

Key points of difference among states include;

  • The average annual credit card fee for Western Australia ($96.70) and New South Wales (A$94.7) were $15 more expensive than the third region, the Australian Capital Territory, at $81.
  • South Australia was the most frugal in both cash advances and international transaction fees with an annual average of $54.79 in fees per credit card holder versus New South Wales at $77.83 in cash advance fees and $32.90 versus $40.62 in Queensland in international transaction fees.


Trends in metro areas

Australia is a predominantly urbanised country where its population coalesces around three east coast regions in South East Queensland (Brisbane/Gold Coast), Sydney (including Central Coast and Wollongong) and Melbourne, and Perth in the west.

The chart below reveals a range of interesting findings.  Among other points, Brisbane credit card holders top rivals Perth and Sydney as the number one generator of international transactions fees as well as taking out the top spot with respect to annual average cash advances.

Adelaide seems to be the most frugal in terms of overall credit card fee spend, but Canberra has the lowest annual cash advance spend of any metro area by a wide margin. Higher annual fees in Perth and Sydney correspond to similar data in the state breakdown.

Australian cities credit card fee
Source: Pocketbook, zipMoney, August 2017

Case Study – A Tale of Several Sydneys 

Great disparities found in credit card fee spend across suburbs:

Western Suburbs paying far more in Cash Advance fees;

Eastern Suburbs, Northern Beaches and CBD high international fee spend;

To supplement our nation-wide research findings, we took a close look at Sydney and its suburbs with respect to credit card fees incurred by each region’s residents. The findings were surprising in that they revealed large discrepancies in the amount of fees incurred between suburbs, which in some cases, were less than 10 km apart (this pattern is likely to be duplicated across suburbs nationally as future studies will seek to explore).

The following chart sets out the 5 different credit card fee types compared against 13 Sydney suburbs.

credit card fee Sydney suburbs
Source: Pocketbook, zipMoney, August 2017

Annual Fees

  • Residents living within the Sydney CBD and Outer Western Sydney regions were found to be paying the highest amounts of Annual Fees at $110 p.a
  • Those living in the Macarthur Region paid the lowest at $80 p.a., followed closely by Sutherland Shire and St George residents who paid on average $83 in Annual Fees
  • The disparity between the highest and lowest during the time of research was a whole 32%

Cash Advance Fees

  • Western Suburbs residents paid the most amounts in cash advance fees – $67 p.a. – with the second highest found in Macarthur at $53
  • Outer Western Sydney residents handed over the least at just $26
  • Consumers in the Inner West paid $29 in cash advance fees

International Transaction Fees

  • Northern Beaches, Sydney CBD and Eastern Suburbs travellers incurred the highest costs for credit card purchases overseas with $115, $104 and $101 in fees respectively
  • Consumers in Outer Western Sydney and Macarthur paid far less at $45 and $46 respectively
  • A difference of 88% between the highest (Northern Beaches) and the lowest (Outer Western Sydney) regions was noted

Late Payment Fees

  • When it came to late payment penalties, those in the Upper North Shore were in a league of their own at $81, compared to the next highest region – Outer Western Sydney – at $48
  • Gladesville and Ryde residents paid the least in late payment fees at only $29

Over Limit Fees

  • This category saw the least amount of divergence between suburbs
  • Western Suburbs residents paid the most per year at $62
  • At the other end of the spectrum, Macarthur residents paid $40

Total Average Credit Card Fees Paid

Across the Sydney regions analysed in this study, the total average amount of credit fees paid per person was $301.70 p.a.

National Fee Disparities In Context; Has Australia Reached “Peak Credit Card”?

credit card fee Peak credit card
Source, RBA Credit Card Statistics, Pocketbook, ZipMoney, August 2017

To put some national context around these findings, based on a review of RBA data and zipMoney’s analysis of Pocketbook data, it appears that nationwide consumers paid Australia’s credit card companies over $1.5 billion in credit card fees last year.

ZipMoney’s analysis has been done within the context of a growing national focus on credit that has most recently seen the Australian Treasury conduct a consultation period on a draft bill that would introduce a range of measures designed to support the consumer as they navigate credit and encourage greater transparency.

The results of our research support the increasing likelihood advanced by zipMoney’s Chief Growth Officer and Head of Credit Research, Andy Mitchell, that we may be reaching what he has called “Peak Credit Card”.

“Peak Credit Card is the point at which maximum credit card usage is reached. From here, credit card usage enters terminal decline as alternative payment methods, new payment platforms, changing behaviours, consumer disillusionment with credit and a growing awareness of fees emerge,” Mitchell says.

“Credit cards represent a very complex system, so any predictions need to take a range of variables into account, but it’s safe to safe that there are many cultural, technological and regulatory issues putting significant pressure on the traditional credit card model —hopefully to the long-term benefit of the consumer.”

In the past 20 years, credit card fee revenues for Australian banks have risen from $A125m in 1997 to $A1.5 billion in 2016 at an average pace of 15 per cent p.a., according to the Reserve Bank of Australia. The current research establishes a baseline against which future consumer credit card fee behaviour can be tracked.

The concept of Peak Credit Card is also supported by Australian Bureau of Statistics data that has shown the pace of revenue generated by credit card fees nationally has moderated in the past five years as consumers become more discerning around the use of credit cards.

This has also resulted in a decline of the average interest accruing balance, dropping from $2,500 to $2,000 in the past five years.


Knowing all of this, we can’t help but wonder just what it is that we should do next.

  1. Know what you’re paying for when it comes to annual fees. It’s no secret that annual fees can be expensive. With the amounts you end up paying, you could easily buy a pair of new sneakers or take yourself out for a nice boozy dinner. Our advice would always be to read the fine print, understand what reward points actually mean, and plan to take advantage of benefits like free travel insurance, which is sometimes offered with new credit card sign-ups. Remember: you’re buying something with your annual fee. Choose what that is wisely.
  2. Do not go to an ATM with your credit card. EVER. This is possibly the worst thing a saver can do. Not only will you be hit with ATM fees (the bane of anyone’s existence), but you’ll also be paying a cash advance fee for withdrawing funds. Always plan ahead. There are plenty of alternatives.
  3. Set up a monthly calendar reminder to pay back your credit card.  You wouldn’t be late for a job interview, so give credit card bill payments the same treatment. A little bit of discipline and the help of iCalendar or Outlook could help you stay ahead painlessly. Even if you can’t pay the full amount, paying back whatever you can will help you avoid unnecessary fees.

For Media Enquiries please contact Jonathan Englert at [email protected] or Harvey Ferle at [email protected]

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