A reader has sent me a spreadsheet that amazed me when I got around to examining the data. We have all been aware of occasional media reporting of high credit card interest rates compared to the RBA cash rate and we see the rates near 20% on our card statements. For example – The $2 billion credit card ripoff – and from two years ago – Big banks in credit card gouge
Until I plotted the data for myself I had no idea that the banks have been increasing the difference between the interest they charge on cards compared to the RBA cash rate over the years.
Note how both the ANZ and CBA Visa Card rates stay near 20% and very near one another as the RBA cash rate reduces.
But this chart of the two differences leaves no doubt as to what is happening.
The Government should move to increase real competition in our retail banking sector – these charts show there is no competition. When I last looked banks were big contributors to political parties.
I would appreciate people sending me data from other credit cards and the other two banks. Enter columns into a csv file or old xls please – not new fangled xlsx. If you are concerned at these ever increasing credit card interest rates lease send this information on to wherever it may help.
I think I recall many years ago banks going to the Fed Reserve and asking for the introduction of an annual fee for credit cards. The banks claimed that they would be then able to reduce the amount of interest charged.
Mmm – that worked well (for the banks).
The only way to beat them now is:
* pay the full amount each month with an Award points CC, and;
* use the card extensively as the amount of cash awarded can offset, or even pay for, the annual fee .