Prime Minister Malcolm Turnbull says his inquiry into the nation’s four big banks has brought real results after the ANZ said it was cutting interest rates on two of its credit cards.
ANZ 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.
“I’m bringing the banks regularly before the House economics committee and they are being held to account for their actions and you are seeing real results,” Mr Turnbull told reporters in Darwin on Sunday.
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.
Liberal MP Scott Buchholz, who is a committee member, said a royal commission had no capacity to instruct the banks about dropping their interest rates, whereas the inquiry had brought results and he welcomed ANZ’s decision.
“They’ve shown commercial courage and leading the charge on dropping the rates first,” he told ABC television.
But consumer advocate Choice spokesman Tom Godfrey said none of the big banks had credit cards with competitive interest 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,” he 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,” executive Fred Ohlsson said.
“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 the majority of credit cards advertised as low rate were up around 14 per cent, making them cold comfort for many families.
“A lot of people are on credit cards with toxic interest rates around 18 or 19 per cent or higher,” he said.
Crossbench senator Nick Xenophon 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,” he said.