Lower interest - priceless

Kiwi shoppers could see the credit card market follow Britain and the US and charge interest rates based on the customers' risk of defaulting on their debts.

Credit card promoters in New Zealand do not differentiate between borrowers, meaning everyone with standard cards is charged interest rates of 19.45 per cent to 19.95 per cent.

Therefore, the least risky borrowers pay extra to cover those with bad credit records. But firms such as GE Money and Mastercard expect new cards to appear in the maturing New Zealand market, giving better borrowers less to pay in interest and those with poor credit histories more to pay.

In the UK, those with good credit records pay 12.9 per cent or less for a standard card, but those with bad records are charged 25% or more.

But New Zealand's big banks say Kiwis do not need, or want, more credit card options - even though those banks are owned by Australian banks reportedly considering risk-based pricing.

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