IN A rare win for customers used to bad news from the banks, ANZ is dropping its credit card interest rates.
The bank will from Thursday cut its low rate platinum card by two per cent to 11.49 per cent and its low rate classic card by one per cent to 12.49 per cent, which it says are the lowest rates since 2003.
Prime Minister Malcolm Turnbull seized on the move as evidence that his inquiry into the nation’s four big banks had brought “real results”.
“I’m bringing the banks regularly before the House economics committee and they are being held to account for their actions,” Mr Turnbull told reporters in Darwin on Sunday.
But consumer group Choice says the move is cold comfort to Australians being “taken for a ride” by the big banks.
Choice spokesman Tom Godfrey said while the decision to drop its interest rates was a welcome start, none of the big banks had credit cards with competitive rates.
“It’s an attempt by ANZ to try and take the heat off themselves and the other banks to show they’re responding to community concerns,” Mr Godfrey told AAP.
“The big four banks are just not competitive. The best interest rates in the market are under 10 per cent and offered by the credit unions.”
The majority of customers with ANZ’s low rate platinum or low rate classic cards were middle class people using them for everyday purchases such as groceries, the bank said.
“We’ve listened to customer feedback about credit card rates and decided our Low Rate customers would benefit most from a rate reduction as they are more likely to have ongoing debt from month to month,” said group executive Fred Ohlsson.
“These changes mean they will have the best rate available from any of the major banks or any of the regional banks owned by the majors.”
But Mr Godfrey said majority of credit cards advertised as “low rate” were up around 14 per cent, while “a lot of people are on credit cards with toxic interest rates around 18 or 19 per cent or higher.”
Choice has called for a review into banking sector competition.
Crossbench senator Nick Xenophon welcomed ANZ’s move but said the banks needed to do more to bring down credit card costs.
“The gap between the official cash rate and credit card rates has never been higher and I think that we really need to look at some form of either greater market competition, or the banks need to really explain themselves in gouging consumers in this way,” Mr Xenophon said.
A member of the House of Representatives committee that grilled the big four banks last year welcomed the move.
“They’ve shown commercial courage and leading the charge on dropping the rates first,” Liberal MP Scott Buchholz told ABC television on Sunday.
He and the Turnbull government remain opposed to the royal commission on banks Labor, the Greens and others continue to pursue.
Last October’s review by the House of Representatives committee was the government’s response to repeated calls from Labor, the Greens and others for a royal commission.
The committee is due to review the banks again early next month.