christopher zinn calls on australian government to respond to calls for inquiry into exorbitant credit card interest rates
Consumer Advocate Christopher Zinn is today calling on the Australian Federal Government to address the growing push for an inquiry into how to reduce exorbitant credit card interest rates.
The calls started earlier this week when Victorian Treasurer Tim Pallas wrote to Federal Treasurer Josh Frydenberg asking him to tie credit card interest rates to the official cash rate.
Since then, multiple key organisations have joined the call for new action to curb high credit card interest rates. Christopher Zinn has joined the call on behalf of SmartWayToPay.
Since Mr Pallas wrote his letter the following groups have joined to support his message:
- Choice highlighted the fact 12 credit card companies last year were charging higher rates than in 2017, with some charging more than 20 per cent.
- Financial Counselling Australia chief executive Fiona Guthrie said the ACCC should investigate credit card rates, especially in relation to the cash rate.
- The Finance Sector Union’s Nicole McPherson said the credit card market is “open slather”, leading to “a tragic cycle of spiraling debt for the customer”.
Despite the cash rate lingering at historic lows, credit card rates remain at an average 17.5%.
“There’s mounting pressure to reform the system so out of sync with the cash rate, mortgage rates and savings rates. Despite the COVID recovery the economic outlook is still uncertain especially with the end of JobKeeper,” said Zinn.
Australians paid down over $7 billion of card debt last year and cancelled almost 1 million cards. However, as a country, we still owe over $20 billion.
In February, the RBA Governor Phillip Lowe expressed frustration with high credit card interest rates urging Australians to find ‘better products’ and move away from high interest credit cards.