Credit card holders slugged yet again

Despite cuts to the official cash rate, certain banks are hiking card interest rates forcing consumers to switch to credit card deals that charge lower interest rates.

Even though the Reserve Bank of Australia has slashed the cash rate by 2 percent some card providers have seen fit to increase their interest rates.

When the RBA began its series of rate cuts several of the major financial institutions increased their credit card rates by 2 percent or more.

Sadly not a single credit card provider saw fit, to pass on the entire 2 percent points of official cash-rate cuts since September.

It is difficult to justify an increase in rates when the RBA has been aggressively promoting the reduction there of.

It has been recommended that more pressure be placed on the banks to pass on interest rate cuts across all financial products, so that the economy can receive the greatest injection of funds.

It has been felt that the banks have not passed on the full interest rate cuts as they have been keeping the savings for themselves, to help subsidise cuts to their mortgage rates.

With some banks charging interest rates just under 20 percent borrowers paying more than that should consider switching to a zero per cent deal which will ensure that their capital is repaid sooner.

Published on November 11-st, 2008 in Credit Cards
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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