Australian banks have pocketed $6.3 billion from credit card customers by failing to pass on interest rate cuts over the last decade, new analysis shows.
Key points:
- The Coles branded Coles Low Rate Mastercard has had the largest rate increase according to CHOICE data
- Second on the list is the ME frank credit card, followed by the Police Credit Union Extralite Credit Card
- In 2015, Commonwealth Treasury officials explained banks considered credit cards to be riskier than other loans given their unsecured nature, prompting a higher rate to be charged
Some of the better-known credit cards — often tied to rewards programs — have even increased their rates in recent years, undermining the Reserve Bank’s efforts to relieve pressure on households.
Since 2011, the Reserve Bank has cut the official cash rate from 4.75 per cent to 0.25 per cent (an historic low for Australia), but some credit card customers have received the opposite treatment to mortgage holders — with some card rates climbing above a staggering 20 per cent.
“By failing