Kiwibank cuts credit card interest rates, dropping some below 10% for the first time as it announces new Visa deal at Mastercard's expense

Kiwibank is reducing the interest rates charged to borrowers using its credit cards as it moves to Visa from Mastercard.

The state owned bank says the reductions include;

It's low rate purchase interest rate dropping to 9.95% p.a. from 13.45% p.a. 
It's low rate cash interest rate dropping to to 9.95% p.a. from 22.95% p.a.
It's zero purchase interest rate dropping to 13.95% p.a. from 16.90% p.a.
Its zero cash interest rate dropping to to 13.95% p.a. from 22.95% p.a. 
Its gold purchase interest rate dropping to to 13.95% p.a.from 17.90% p.a. 
Its gold cash interest rate dropping to to 13.95% p.a. from 22.95% p.a. 

Kiwibank says it's the first time its lowest credit card rate has been below 10%.

"The low rate card will sit at just 9.95% p.a. for purchases and cash advances and the annual fee has also been reduced to $30 p.a. from $48 p.a.," Kiwibank says.

For comparisons see all credit card interest rates here.

“With interest rates at an all-time low, reducing rates on our low rate cards is the right thing to do. This will help many of our customers, and it’s one of the many ways in which we’re committed to helping make Kiwis better off," Kiwibank chief marketing officer Mark Wilkshire says.

"We believe reducing the interest rates on our low rate credit cards will make the biggest difference for everyday Kiwis, so we’ve started with these."

In interest.co.nz's view reductions to credit card interest rates are long overdue, with many cash advance and purchase credit card interest rates sitting near or above 20% in a low interest rate world. In February banks were warned to proactively assist customers struggling with credit card debt to stave off potential regulatory action and loss of business to competitors such as 'buy now, pay later' schemes.

The reduced rates apply to Kiwibank’s range of "low rate" credit cards from July 2019, for existing customers as well as new customers. For customers who already have a "low rate" credit card, any interest charged on statements issued from July onwards will be applied at these new interest rates, Kiwibank says.

Kiwibank also also says it's entering a new, exclusive partnership with Visa to provide both its credit and debit cards. The bank has been working with Mastercard. Wilkshire says working with Visa will allow Kiwibank to offer "better innovation" to customers in the future.

Kiwibank customers can apply for a Visa credit card from next Monday, July 1.

"Existing customers do not need to do anything just yet. During the next 12 months they will be switched to a Kiwibank Visa credit card and will hear directly from Kiwibank a few weeks before receiving their new card." 

Update: We have corrected the Kiwibank balance transfer details.