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Are the big 4 banks doing enough to support Australians?
The four major banks have passed on a raft of changes to help support Australians doing it tough, but could they be doing more? An industry expert asks.
Are the big 4 banks doing enough to support Australians?
The four major banks have passed on a raft of changes to help support Australians doing it tough, but could they be doing more? An industry expert asks.
According to the latest research by Finder, NAB is the latest bank to pass on reduced credit card rates, falling to 12.99 per cent.
However, with the rising credit spending due to unemployment and panic buying, Finder’s money expert, Bessie Hassan, has found that while the cash rate nationally has fallen, credit card rates are rising.
“Since the GFC in 2008, the cash rate has fallen by 6.5 percentage points to 0.25 per cent, while standard credit cards have increased by 1.37 percentage points on average, and low-rate cards have increased by 1.22 percentage points (according to RBA data analysed by Finder).”
While the cash rate has been falling since 2011, standard credit cards have increased on average by 0.25 percentage points, and low rate cards fell by just 0.26 percentage points. This is compared to the cash rate falling by 4.50 percentage points since November 2011.
Ms Hassan highlighted that interest-free packages could be better than the short-term finance options the banks are offering as Australia tries to deal with “a combined $48.7 billion in credit card debt, and this number is expected to rise as millions of Australians are being financially impacted by the coronavirus.
“Finder shows that Australians are spending more money using their credit cards while paying less of the balance off. This is a worrying trend. Short-term relief is a great start, but cardholders need to remember that it’s not free money and they will need to pay it back eventually,” Ms Hassan said.
NAB joins at least six other lenders that have announced support to credit card customers, including the Commonwealth Bank.
Westpac and ANZ have not announced specific measures for credit card customers.
“Despite some lenders announcing credit card support, credit card holders are still the hardest hit as lenders hold onto rate cuts,” Ms Hassan concluded.
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