Credit card rate a mystery to many

Australians could be in for a rude shock when they open their Christmas credit card bills.

A survey has found many people have no idea what the interest rate is on their credit card, leaving them exposed during the festive spending spree.

An Essential Research survey commissioned by the Customer Owned Banking Association (COBA) found more than half of respondents used their credit card for buying Christmas presents.

Yet 46 per cent did not have a clue what interest rate they paid.

COBA chief executive Mark Degotardi said the result showed an "alarming lack of knowledge".

He said the poll of more than 1000 respondents also found a significant number of younger Australians (18 to 34 years) wrongly thought the big four banks - ANZ, Commonwealth Bank, National Australia Bank and Westpac - offered the best rates.

He said figures from financial product comparison organisation Canstar showed the average credit card rate for the big four was 18.06 per cent, whereas the average for the customer-owned banking sector was 13.07 per cent.

"Consumers are clearly forking out much much more than they need to," Mr Degotardi said.

COBA represents financial institutions such as credit unions and building societies.