Credit card rates 'set to remain high'
Article by Mozo
Although many economists are predicting cuts to interest rates next month, credit card holders have been warned that the changes are unlikely to benefit them.
According to chief executive at the Australian Bankers' Association Steven Munchenberg, there are far more risks associated with credit cards than there are with other bank products such as home loans, National Features reports.
He suggested that banks were more relaxed about lending before the global financial crisis took hold in 2008 and since then they have been forced to "reprice risk".
"Credit card lending is high-risk lending, particularly compared with mortgages," he was quoted as saying.
Commsec economist Savanth Sebastian added that banks are unlikely to pass on interest rate cuts made by the Reserve Bank of Australia (RBA) in their entirety.
"The cost of lending money out at the moment for the banks is expensive," he remarked.
Last week, opposition treasury spokesperson Joe Hockley told Melbourne Talkback Radio that the RBA needs to make interest rate cuts in order to stimulate economic growth.
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