One in 10 consumers have switched credit products in the past year, according to new research, with Millennials and women in particular pouncing on offers from small banks, credit unions and building societies.
The financial landscape is shifting.
Over the past 12 months, 10% of consumers have switched credit providers, according to the Australian Consumer Credit Pulse 2019 report from Equifax, as once-loyal customers increasingly check out what lenders outside the Big Four banks have to offer.
Is now a good time to consider a switch?
With the RBA recently delivering back-to-back rate cuts, there's no shortage of borrowers who are considering following suit and switching things up.
In fact, a further 11% of consumers intend to apply for credit in the next three months, says Equifax, and of these, half are looking to switch providers when they make their application.
James Forbes, General Manager, Marketing Services at Equifax, says that over the past 12 months the Big Four banks have ceased to be the first preference for many consumers who are switching credit products.
"Instead, they're increasingly choosing small banks, credit unions and building societies," Forbes says.
So what credit products are people switching?
Home loans and credit cards. They're the big two.
Of the one in 10 people who made the switch over the past year, a quarter moved their home loans and nearly half moved their credit cards.
Home loans are also a popular product among the 11% of consumers intending to apply for credit in the coming months, making up half of the intended applications.
Who's switching things up?
According to the report, the younger you are, the more likely you are to switch lenders.
In fact, out of all consumers who switched credit products in the past year, 43% were aged 18-34, and 32% were aged 35-50.
Women are also more likely to switch three or more of their credit products, while men are likely to switch just one or two.
What's driving the behaviour?
Unsurprisingly, lower costs – including interest rates and fees – were the major consideration for switching across all credit product types, Equifax says.
However, consumers also cite better customer service and brand reputation as important considerations.
"In the wake of the Royal Commission, consumers are increasingly thinking about more than just cost when applying for credit," says Forbes.
Keen to pounce?
With the RBA recently delivering back-to-back rate cuts, if you haven't looked into your refinancing options lately, now might be the time to consider doing so.
Rest assured that we're following the market closely and will be happy to run you through some mortgage and refinancing options if you're on the hunt for a new lender.
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