Whilst Labor welcomes ANZ's decision to cut interest rates on two of its low rate credit cards and urges other banks to follow the decision, much more needs to be done by the banks to stop ripping credit card customers off with unfair fees and other hidden costs.
With the cash rate at an all-time low banks have benefited for far too long from stubbornly high interest rates on credit cards with banking customers being slugged a staggering $5.5 billion in interest charges a year.
There is no doubt that credit card fees and charges have been very lucrative for the banks and its well past time that credit card customers are given a fair go from the highly profitable credit card industry.
For example credit card fees have been increasing at a much faster rate than any other bank fee and now make up over one-third of all of the fees banks collect from households every year with $1.5 billion paid in annual credit card fees alone.
With the average credit card holder in Australia owing $4,262 on their card and with $734 paid in interest per year, every increase in fees, charges and hidden costs hits households hard - particularly low and middle income households.
It's time all of the banks looked at how they provide credit cards to their customers and not just interest rates.
Banks should look seriously at the annual fees charged, cash advance fees, late payment fees, and other products like credit protection insurance and the reward program rip-offs.
Labor understands that credit cards provide Australians with flexibility when it comes to managing their finances but Labor also believes that banks should ensure that the conditions attached to these products are fair and reasonable and not simply used as a way for the banks to make more money out of their customers.
MONDAY, 20 FEBRUARY 2017
Senator Katy Gallagher is Labor's Shadow Minister for Small Business and Financial Services.