Banks blasted over credit card rates
CREDIT card users are being stung with higher interest fees despite the biggest Reserve Bank cuts to official rates in years.
Treasurer Wayne Swan yesterday demanded banks explain their failure to pass on savings amid concerns millions of customers have received no relief.Rates on most cards have not budged despite the RBA slashing cash rates by 3 per cent since September, says financial website Infochoice.
Rates on some products have risen.
The consumer group’s trace of 140 credit cards issued by banks, credit unions and building societies has found rates had fallen just 0.28 per cent on average since September — less than a 10th of the Reserve’s cuts.
ANZ bucked the trend yesterday by passing on in full the RBA’s latest 1 per cent cut to key credit cards, just a day after it was attacked for refusing to give the full reduction to home loan clients.
ANZ’s Rewards Visa and Frequent Flyer Visa rate will drop to 18.99 per cent from next Friday. First and Gold cards will fall to 18.24 per cent.
The Commonwealth will cut rates on all cards by 0.4 per cent from December 19. A spokesman said less than half the bank’s credit card customers paid interest.
Australians owe almost $45 billion on credit cards with some incurring interest charges of up to 20 per cent, nearly five times the official cash rate.
Infochoice says Wizard’s Clear Advantage card rate has risen 2.75 per cent and GE Money’s low-rate Mastercard is up 2 per cent since the RBA’s bid to boost the economy.
Suncorp, Encompass Credit Union and Bank of Queensland have also lifted rates on some cards by up to 0.84 per cent, the consumer group says.
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