CBA has launched another initiative to win back public faith, as leaders from the big banks prepare to face a parliamentary grilling in Canberra today.
The bank today announced a suite of credit card initiatives, including a new low-interest-rate card at 9.90 per cent.
Australians collectively owe $51.34 billion on their credit cards, $31.48 billion of which is accruing interest, according to the most recent RBA data, for July.
RateCity research shows the new CBA card, when available next year, will be the fifth-lowest rate on the market, alongside it’s big four competitor Westpac.
Important move from CBA
RateCity money editor Sally Tindall said the changes would help customers better reduce their debt, if implemented correctly.
“It’s important that Australia’s largest bank has a low-rate card on the table. Today’s announcement will give Australians access to a more responsible credit card option,” she said.
“The proposed real-time alerts for high-cost transactions for all CBA credit card customers is another valuable offering.
“Too often people take money out as a cash advance without realising they’re being hit with a hefty fee and an astronomical interest rate.
“This tool will help people immediately realise the cost of their actions, and change their behaviours.
“CBA’s new instalment feature has the potential to help customers pay down their debt, much like a personal loan. This feature is long overdue in the Australian market and should be applied across the board.
“While this is a win for consumers, the timing of this announcement suggests political pressure is a great motivator for the banks,” she said.
Minimum repayments continue to mislead Australia credit card holders who still pay billions in interest to the banks each year.
RateCity analysis of RBA and Roy Morgan data shows that the average credit card holder has $4,055 accruing interest on their cards right now. At the average credit card interest rate of 16.99 per cent, that’s $689 in interest a year.
Low-rate credit cards
|My Credit Union||Low Rate Visa||7.99%||$59|
|Community First CU||Low Rate Black Visa||8.99%||$40|
|Bank Australia||Low Rate Visa Credit Card||9.39%||$59|
|G&C Mutual Bank||Low Rate Visa Credit Card||9.49%||$50|
|Commonwealth Bank||New low rate card||9.90%||$60|
Current CBA credit card offering
|Low Fee Gold Mastercard||19.74%||$89|
|Low Fee Mastercard||19.74%||$29|
|Low Rate Gold Mastercard||13.24%||$89|
|Low Rate Mastercard||13.24%||$59|