Australian Credit Card Borrowers Face Higher Interest Rates

Post by Sharat on March 9, 2010 · Under Australian Economy, Business News, banking, credit cards, interest rates · 1 Comment 

Australian credit card holders face the spectre of higher monthly payments as major lenders increase their interest rates in response to the central bank tightening official cash rates.

Westpac and CBA have both already committed to raising credit card rates by 25 basis points starting this week.

Analysts say that a 25 basis point hike in credit card rates implies that borrowers now pay an additional $110 in annual interest on a balance of $3000.

Some consumer advocates are extremely critical of the decision to raise interest rates, given the economic recovery and improved profitability of the major banks.

Many point to the fact that the bad debt ratio for banks are declining, and some even suggest that their borrowing costs are falling, and the reduction is not being passed on to consumers.

Most banks would argue however that their borrowing costs still remain above where they were prior to the onset of financial crisis, and the criticism that costs have fallen is a fallacy.

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Comments

One Response to “Australian Credit Card Borrowers Face Higher Interest Rates”

  1. debt on March 11th, 2010 3:07 pm

    Mastercard increased my interest rate from 7% to 22% for no reason, I haven’t been late or gone over my limit once.

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