$6.4 billion credit card rate ‘rort’
Credit card providers have pocketed $6.4 billion in profits over the past eight years by failing to pass on official interest rate cuts, according to financial comparison site Mozo.
As bank interest rates on deposits have plummeted in response to the Reserve Bank’s lowering of the cash rate – now at a historic 0.10 per cent – cuts have not filtered through to credit card interest rates.
“The failure to provide rate relief to credit card customers after the RBA cuts the official cash rate has become a bad habit and a multibillion-dollar business,” says Mozo director Kirsty Lamont.
“Although we have been conditioned to thinking credit card providers will not pass on official interest rate cuts, it’s encouraging to see one provider (Auswide Bank) take the opportunity to put their customers first.
“At a time when credit card providers are faced with increasing competition from buy now-pay later services, something as simple as providing interest rate relief could be the difference between retaining customers or not.”
Mozo found that while $20 billion worth of credit card balances were accruing interest across the country, that figure was down 46 per cent compared with a high of $37.1 billion in 2012.
Mozo says the average credit card interest rate is 16.39 per cent and that the gap between the average credit rate and the average cash rate has widened significantly since 2011, increasing from 12.94 per cent to 16.29 per cent.
“If your card provider hasn’t cut your interest rates and you’re carrying a balance forward, it’s worth comparing interest rates and switching to the best rate you can find,” Ms Lamont says.
Banks are all a pack of "rip off" Bastards, just like the Energy Companies.