Banks deprive credit card customers nearly $3 billion over 5 years
Australian credit cardholders paid almost $3 billion more over the last five years, due to banks failing to pass on the interest rate cuts advised by the RBA. The data, uncovered by Mozo, revealed a widening gap between official rates and reality.
“With credit card providers stubbornly holding on to official rate cuts, we’re looking at
a yawning chasm between the record low cash rate of 1.5% and the current average
credit card interest rate of 17.37%,” said Mozo Director, Kirsty Lamont.
The major banks have recently been under the spotlight for making partial rate changes on their home loans, rather than passing on the RBA’s record breaking cut. Five banks slashed mortgage interest rates by 25 basis points, whereas the big four applied measly adjustments of between 10 and 14 basis points to their home loan products instead.
Lamont warned customers that most banks have left credit card interest rates untouched in the last five years.
“Credit card providers seem to be banking on customers forgetting that RBA rate relief
isn’t just about home loans, with a pathetic 3% of banks passing the May cut on to
credit card customers, and just one bank announcing it will pass on the August cut so
far,” she said.
In other credit card news...AMEX launched a credit card feature dubbed “Pay Your Way”
There is hope for customers who want a credit card with reasonable rates however, as the Mozo database can reveal some hidden gems in the market. For instance, Bank Australia’s Low Rate Visa now has the third lowest purchase interest rate of 9.39%, with the Quay Credit Union Visa on top at 7.99%.
“The average credit card customer could save more than $400 in interest repayments over a year by switching to the most competitive card in the market from a card with the average purchase interest rate,” Lamont said.
If you are looking to switch over to a credit card with a lower interest rate than your current piece of plastic, keep in mind that Mozo compares no less than 207 from 61 providers. Ditch a high rate and start your search here!