The FBAA is urging the banks to lower credit card interest rates in line with the low interest rate environment.
FBAA chief executive, Peter White
has applauded the Reserve Bank of Australia (RBA
) for challenging the banks as to why customers have to accept these “sticky” rates on credit cards which average around 19%.
“We know that card rates have to be higher than regular rates because it’s an unsecured line of credit but it is time customers felt some relief with a reduction in their interest repayments,” he said.
According to White, credit card customers are the innocent victims of big banks losing money from other banking services, such as dwindling ATM transactions.
“I found in interesting to note that ATM fees are sliding dramatically because more people are using digital platforms to make payments. I hope this is not the reason why banks refuse to drop interest rates and charges on credit cards.”
The Senate Estimates Hearing was called in response to banks keeping rates unchanged for more than four years while the official cash rate had fallen dramatically in the same period.
According to the FBAA, Australians currently hold 16 million credit cards which bring in around nine billion dollars in interest charges and fees to banks.