Some Credit Card Lenders Actually Increasing Interest Rates

Post by Neil on November 21, 2008 · Under Hints and Tips, credit cards ·  

Some Australian credit card lenders have been raising their interest rates despite the Reserve Bank of Australia (RBA)  having cut official lending rates by 2 per cent since September.

The Daily Telegraph conducted research which showed at least 5 card issuers have actually increased their interest rates rather than decreased them in line with official policy. According to the financial data company Infochoice, both GE Money and Wizard Home Loans increased their credit card rates more than two per cent since the central bank began easing lending rates through a series of rate cuts.

Bank of Queensland, Citigroup and Suncorp also rates on some but not all of their cards. The survey found that not a single card issuer had passed on the entire 2 percentage point cut  in official lending rates to their customers.

Shaun Cornelius of Infochoice said “It’s surprising to see card rates rising after aggressive cash rate cuts” but added “Some of those cards raising rates are still good value, with rates of under 15 per cent. It’s harder to justify if you are charging near the average of 19 or 20 per cent”

Some observers feel that banks should be obligated to ensure that interest rate cuts are passed on to their customers and should be applied across the full spectrum of financial products.  The average interest rate on a credit card in Australia is just under 20 per cent. Borrowers who are paying above average should switch to a lender with lower rates immediately and if possible, in order to pay off capital quickly to a zero per cent deal.

Compare Australia’s Best Credit Card Deals

E-mail Comment Del.icio.us Digg Reddit Technorati Furl

Tags: ,

Comments

Leave a Reply




Advertisement
Sponsored Ads