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Credit card rates should be next on Ruddâ��s agenda, says peak body Finance and mortgage broker peak body, the Finance Brokers Association of Australia (FBAA), believes the Rudd government need to look at the exorbitant interest rates banks charge on credit cards if it’s serious about assisting struggling households in this uncertain economic environment.

FBAA National President, Peter White, said the commonality between households facing financial stress is burgeoning credit card debt yet it continues to pass unnoticed when the banks fail to hand down official rate cuts on credit cards.

“The FBAA supports the Rudd government’s measures to stimulate the economy but one straightforward option they need to explore is to simply place pressure on the banks with respect to credit card interest rates,” Peter said.

“Last week the RBA announced a 1.0 percent cut in official interest rates and this should have been passed on across all loans and credit lines, including credit cards.

“The banks have somehow engineered a situation where they pass on any increase in official rates to credit card holders but don’t act in reverse when rates are cut. Unfortunately for households struggling in the debt cycle it’s a one-way street as rates invariably head in one direction.

“The latest RBA data indicating Australians are becoming more conservative with credit card expenditure is certainly positive. Notwithstanding the latest figures, Australian households are laden with personal debt and this is largely due to the nation’s long-standing love affair with credit cards.

“If the government can assert some pressure on the banks to amend credit card interest rates in alignment with downward movements in official rates then this will have an equal or greater impact than the first home-buyers grant or baby bonus and it won’t cost Australian tax payers a cent.

-ENDS-

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