Friday, December 5, 2008

Rates on credit cards not coming down

Rates on most Australian credit cards have not budged despite the Reserve Bank (RBA) slashing cash rates by 3 per cent since September.

Consumer advocate, Infochoice traced 140 credit cards issued by banks, credit unions and building societies and found rates had fallen just 0.28 per cent on average since September less than a 10th the Reserve's cuts. In fact, rates on some products have risen.

According to Infochoice, 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 started cutting rates in a 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. Card providers have denied rip-off claims, insisting credit card interest rates are linked to risk, defaults and the cost of obtaining funds in a volatile market.

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.

ANZ Bank has bucked this trend by passing on the RBA's latest 1 per cent cut in full to key credit cards, just a day after it was condemned for refusing to pass the full reduction onto home loan customers. 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 Bank will cut rates on all cards by 0.4 per cent from December 19. A spokesman for the bank said less than half the bank's credit card customers paid interest, instead paying out their cards in full by the due date.

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.

3 comments:

Tom Thorne said...

Paul, I am not really familiar with adding alkilinity to your diet. Dr. Scott Olson may be able to help, his blog is http://www.olsonnd.com. But, you have a geat blog.

Banks Lie Low, As Congress Decides Their Future said...

http://www.csmonitor.com/2009/0120/p01s03-usec.html

Inspite of having received $232 billion in aid from the US treasury, banks are still behaving gutless and timid. There are number of reasons for this – losses in mortgage debts, the worst recession of all times, and numerous defaults on credit cards being just a few of them.
It seems that the banking system on its part is also not ready to put in more efforts to stand up on its feet. They are continuously demanding more and more financial assistance. They have put across their demands once again before the Congress. The Congress will, of course, consider whether the banks truly need more funds to the tune of millions of dollars. For now, we can only sit back and speculate. The Congress will vote on the matter in a few more days.

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