Consumer advocacy group CHOICE has called on the big four banks to pass on the benefits of the latest interest rate cut to their credit card customers as well those with mortgages.
“The big banks will be making announcements about the impact of this rate change very soon. They’ll have a lot to answer for if, like they have many times before, they fail to pass on expected reductions to credit card customers,” says CHOICE Head of Media Tom Godfrey. “With official interest rates at record lows, it’s staggering to think the big four banks are still punishing consumers with credit card interest rates in excess of 19 per cent per annum.”
Even with the Reserve Bank of Australia’s (RBA) cash rate cut, many major banks, including ANZ, Commonwealth Bank, NAB and Wetspac, still charge around 20 per cent annual interest on credit card balances. CHOICE advises consumers that now may be a good time to scrutinise the financial products that they currently have in place.
CHOICE also recommends that customers ignore all the ‘bells and whistles’ that may distract them from the credit card’s very high interest rates. These ‘distractions’ include rewards schemes, interest-free periods, balance transfers and low annual account fees.
“The major banks’ low-rate cards are worth considering, but with the most competitive of the lot only offering an interest rate of 13.24 per cent per annum, they are still a long way from the best deals on offer,” says Mr Godfrey.
If banks were to pass on the benefits of the latest rate cut, it may come as a welcome consolation to many – especially to those trying to find some ways to compensate for retirement shortfall, or at least cover monthly expenses without suffering from late-payment penalties.
Would lower interest rates on your credit cards help you through the tough times ahead? How much more will you become reliant on your credit cards, considering the possible loss of earnings as a result of the RBA’s cut? Do you know of any credit cards that have attractive low annual interest rates? Why not share your knowledge?