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Credit card rates rise with RBA increases.



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Media Release by…

ALAN GRIFFIN MP Shadow Parliamentary Secretary for Consumer Affairs & Banking Services 2 July 2002

CREDIT CARD RATES RISE WITH RBA INCREASES

Consumers should be careful to factor in rises in credit card interest rates as a result of Reserve Bank of Australia decisions.

Research shows that all four major banks have passed on both recent rate increases in full to their credit card products. Credit card rates have climbed by 0.5% over the last two months, with some products now as high as 18%.

This is in stark contrast to the banks’ reaction to interest rate cuts - in the period from February 2001, to April this year, official interest rates dropped 2%, however, credit card rates fell as little as 0.75%.

These trends are of particular concern in the wake of recent figures which show that exposure levels to personal debt are at a record high. Average credit card debt of Australian consumers for April was over $2150 - the highest ever.

The surge in debt has placed Australian families under growing financial pressure and made them particularly vulnerable to any increases in interest rates.

One thing is for sure, if the RBA announces an increase in official interest rates tomorrow, history shows credit card rates will follow.

For further information please contact:

Alan Griffin: 0419 353 476 Office: (03) 9547 1444