The rise in rates comes despite overall wholesale and retail market rate falls, but after the SOE bank cut some fees. Many of the increases are steep

Kiwibank has raised most of its main credit card interest rates, increases first signaled three weeks ago.

Kiwibank’s credit cards are on the MasterCard platform.

It has six separate card products and all have seen sharp rises in interest rates.

The increases are mostly +1.00% although their ‘Low Rate’ cards have jumped only +0.55%.

The increases for cash advances are much steeper however.

The changes are:

Kiwibank card name Cash advances   Purchases
  was % new   was % new
Low Rate 12.90 +7.05 19.95   12.90 +0.55 13.45
Zero 15.90 +4.05 19.95   15.90 +1.00 16.90
Gold 16.90 +3.05 19.95   16.90 +1.00 17.90
               
Air NZ Airpoints Low Fee 17.90 +5.05 22.95   15.90 +1.00 16.90
Air NZ Airpoints Standard 21.95 +1.00 22.95   19.95 +1.00 20.95
Air NZ Airpoints Platinum 21.95 +1.00 22.95   19.95 +1.00 20.95

These changes were originallly signaled by Kiwibank in early June with a notice that emphasised their cuts in credit card fees.

A Kiwibank spokesperson confirmed the bank is “rebalancing from fees to rates”.

These changes basically remove any interest rate advantage Kiwibank had over ANZ and BNZ.

However, MasterCard or Visa cards issued by ASB and Westpac retain a rate advantage over Kiwibank and their other main rivals.

Along with these rate rises, Kiwibank has cut and simplified many of its fees across a range of products. Some of those were due to adjustments required by the recent Credit Contracts and Consumer Finance Act law changes.

Wholesale interest rates have been falling sharply recently. Most other retail interest rates have followed suit, including mortgage rates, savings rates, and term deposit rates. These rises in credit card rates move against this trend.

You can see all credit card interest rates compared here.

You can see most credit card fees compared here.