Credit Card Interest Rates Fail To Show Big Falls

The Age

Thursday December 4, 2008

By DANIELLA MILETIC, CONSUMER AFFAIRS REPORTER

THE four major banks have marginally cut the interest charged on most credit card accounts since the Reserve Bank began lowering rates in September.

Lenders are also expanding their low-rate credit card range in a bid to attract new and more discerning customers.

The National Australia Bank dropped the interest rate on 11 products by between 0.3 and 0.75 of a percentage point on Tuesday after the Reserve Bank cut the official cash rate by another full percentage point. Rates on its Visa Mini cards were reduced by 0.75 of a percentage point and its Qantas gold and platinum cards were cut by 0.48.

The Commonwealth Bank cut rates on six credit card products by 0.6 of a percentage point in early November, including its Low-Rate and Low-Fee card and its gold and platinum credit cards.

In mid-November, ANZ cut the interest charged on eight on its cards by between 0.58 and 0.75 of a percentage point. The lender's Low-Rate Mastercard and Balance Visa card were cut by 0.58 to 12.41 per cent and 13.41 per cent respectively.

Meanwhile, Westpac dropped the interest on seven of its credit card products late last month by between 0.5 and 0.75 of a percentage point. It lowered rates on cards including the Altitude Platinum, Altitude Gold and Low-Rate card.

Since September, the average fall in credit card rates has been only 0.63 of a percentage point. Some lenders have even lifted charges. Taking the increases into consideration, the downwards shift in credit interest charges overall since September, according to InfoChoice, was 0.28 of a percentage point.

© 2008 The Age

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