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Australian commercial banks continue to keep credit card interest rates high despite an order from the Reserve Bank to reduce them. In September, Australian credit card issuer ANZ Group increased its annual interest rate to 19.99% from 19.49% on some credit cards (CardLine Global, 8 Sept). The ANZ rate increase "was the result of sustained higher funding costs associated with the continued turmoil in global credit markets," an ANZ spokesperson told CardLine Global. The rise in interest rates came as the Reserve Bank of Australia on 3 Sept. lowered its official cash rate to 7% from 7.25%. The Reserve Bank of Australia cut the benchmark lending rate by 100 basis points to 4.25% on 2 Dec., but the move has benefited only mortgage holders, the country's retail association says. "Any interest-rate cuts for credit cardholders will help, but with such a wide variety of low-rate, no-frills credit cards on offer in Australia, the best thing consumers can do is make sure they are on a low-rate card [10% to 14%] rather than a full-featured, high rate card [18% to 21%]," Peter Arnold, a financial analyst with Brisbane-based research firm Cannex Pty Ltd, tells CardLine Global. Australia had 14.2 million credit and charge cards in circulation as of the end of August with AU$32 billion (US$21.4 billion or 16.7 billion euros) in credit card debt accruing interest each month, according to the latest figures from the Reserve Bank.
